Deactivate Wall Hanger Conversion

What Im looking to do, is take a deactivated MkIII* barreled receiver, mate it into a Mk1 timber set, use the mk 3 sight saddle (which will require some modification to the wood I understand so it will fit under the barrel where the rear sight on the MK1 is welded atop, and place the MK1 sight in place of a MK3 to complete the look). Will the timbers of the Mk1 fit to the Mk3 Barreled Receiver? If so I am home set to making a mock Mk1 (which will not harm the original equipment, im assuming just modify a new production forend) I know little about MK1s, any pros cons to this please let me know, thanks again in advance for the insight.

I can see a few cons to what you have in mind... The obvious first one is the availability of a MkI foreend. They are rare as hens teeth and very expensive when the do appear.

I think you may have missed the details on the main difference between the two rifle models- it isn't the bone "buttons" on the rear sight, which is all you look to gain...
The biggest difference is the fittings on the receiver for accepting chargers for loading. You are obviously aware of the charger bridge on the SMLE MkIII. On the MkI the was no bridge. On the left side of the receiver there was a raised part with a short slot in it from the top. There was also a "sliding charger guide" on the top of the bolthead that, when the bolt was at the rear of the action, had a slot that aligned with the slot on the other side to give a place for the charger to locate for loading.
There are quite a few other things like the mounting of the rear sight protectors, nosecap the front sight blade, the safety, inner band, even the swivel screws were different.

Here's a pic of my MkI*** with a charger of drill rounds on the charger guides.

More con's: the long range volley sights are missing from the Mk III* and present on the Mk I.