yes, this can be done with parts from existing cars.
the most popular car used was the ford fairmont/mercury marquis. still, you can get a brand new rack-and-pinion systems for less than the $900 you're thinking of.
check the mustang mags. they've got parts listings up the wazoo.
this is something i have in mind for my '66 and i will start looking into it as my g/f and i move into our new home and i have the time to start up the project mustang again! :wink2: