My mother told me stories about how her father took apart his MGTD completely in their driveway with very limited tools available... Looks like some fun tinkering.
A big job looms!!! You look like you have a great garage/workshop though so should be ok! Staring with a new chassis seems to be the right route with that level of rust. But... jesus there will be some time involved! If I was 3 months younger.... I'd love the challenge! Good luck and get a swear-box! it will need to be large so you can have a great celebration when the resto is complete - if any resto ever is! It's a bit like an artist with a painting - the secret is knowing when to stop. I bet the end result will be top notch.
In one of my posted pics you will see a big red barrel. That's my - box My resto is planned to stop early 2013, when I can have the car veteran-registered. This saves me a lot of money - and gives me all the time needed for a superb job.