I am fairly new here but you all know what opinions are like, everyone has one; I would definitely restore the metal, not re-cut the grips, maybe clean them if needed.
I am a firm believer in restoring guns that have too much abuse to support collector value. As long as the gun is not altered to be something it was not. I believe restoring gives the collector more opportunity to have a rare piece. I fully accept the fact that a restored gun will not be worth as much as a pristine originals. Truth about the restoration is essential when presenting or selling and should be reflected in the price. I would rather restore a poor example of a rare piece than see it end up as a parts donor. So many rare guns have been lost already and more are ruined each year from poor storage and misguided attempts to "fix" them. I am concerned that without some forms of restoration our hobby will eventually be limited to the ultra rich.

Whew, that was a tall soap box.

Thanks,
Bob M.