Here are some pictures of a cut down water pump (from the "other" list) I
did mine essentially the same way. Use a band saw to cut off the neck at an
angle, I used a router bit to take out the divider, then welded in a new
divider and welded on an outlet tube.
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Thanks for the pictures.  Fortunately, I'm not nearly that desperate.  I've
got plenty of headroom for the pump housing.  I just need to modify the
housing that bolts on top of the thermostat.  That should be easy, since
everyone agrees that you can weld this material.  

Speaking of welding, it's something that I've always wanted to learn how to
do.  I bought a Henrob 2000 torch almost a year ago, and haven't even fired
it up.  As I start looking at the mounting of engine stuff (radiators, oil
coolers, tanks, exhaust, etc) I've come to the conclusion that I need to get
that torch out and learn how to use it.  I've put this off up to now,
because I just didn't feel like I had the time to practice enough to
actually trust what I welded, but now I think I need to at least give it a
try.  Anyone want to give me lessons :-)

Thanks again for all the comments.
Rusty