To conclude the thread, I purchased a Shimano LX M581 rear derailleur for the bike. Wow .... how modern derailleurs have improved. The spring action is super light, the pulley cage is 2cm. longer than the vintage Deore was,allowing for a 45t capacity, up from the 38t of the Deore. Needless to say, it handles everything just fine. Plenty of clearance. I notice easier shifting in friction.
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