If that's true (hard to tell from the angle) then I plan to relocate the battery box to where the AC cord is and do away with it. Maybe I can fit C or D batteries in there and then install a 200mm ferrite rod.
I think this is gonna be fun.
I like your idea regarding winding a separate toroid for the LO.
I will definitely be talking to you about some mods after it arrives.
I hope you can wrangle a schematic somewhere. Reviewing one of my old portables, a Zenith Royal 705, they used a separate inductor for the LO. The lineup is RF stage --> Converter (Mixer/LO) --> IF.
With a tuned external loop (Terk) coupled by several turns wrapped around the ferrite rod, the LO is pulled when the antenna is tuned to resonance. I'm now thinking the RF stage isn't isolated enough from the converter. You don't need a lot of coupling anyway, as the dynamic range of these radios isn't spectacular.
A longer ferrite rod is surely a good way to start, and a 7-inch rod will easily fit in the 9-inch-long case. The battery box looks to be molded right into the case, so good luck relocating it. Cutting the plastic and putting a 4-cell holder where the line cord stores is probably easy. AA cells are good enough; they'll last a long time. Stop by your local supermarket and look for a 9-inch Lazy Susan gadget. Makes spinning the radio to align the antenna a breeze, and they're only a few bucks.