DTS-HD MA and PCM are the best options available that are compatible with Blu-ray which will not introduce additional loss to the material. Which is the real point of "lossless" as far as all of our sources go, since we have no master-like quality available to us. As far as turning your flac mono into something useful, if not DTS-HD MA or PCM, then a good bitrate DTS or DD should be acceptable, as long as you try not to choke it too much on bitrate.

One question I have is (if a link to some other discussion is enough to explain, that'd be fine), what does this '85 home mix offer in comparison to the '93 and non-mono '77? (Okay, I also am not sure what it is '93 [definitive LD sourced, I'm sure] has that's different or desirable either.)