Booshman, another approach to integrating the 4:3 material into the BD footage is to pillarbox as well as letterbox it (after resizing it appropriately). That way, you can enjoy most of the film in widescreen. I’ve seen this done before, and it works. After all, the bulk of the film is unchanged, and the switch occurs only briefly for a few shots/sequences, which are going to stand out whatever you do. It would save you a great deal of work.

By the way how are you panning and scanning the film? It sounds as if you are managing to do it quite swiftly.