For what it's worth, I agree with Hugh Thornton, that a 100% Reynolds 531 frame makes it a top-end Peugeot, but determining the exact model could be more difficult. The original owner may have had some components changed at the time of purchase, and/or may have done modifications himself later. Since he is still presumably available for comment, I would ask him, if you have not already done so.
If this frame is made of French-sized tubing, yet has an Italian handlebar, then the stem must be one of those that is French on one end and Italian on the other, which means it may be difficult to find a replacement. It might be easier to replace both the stem and the handlebar with French made items.
As a broader issue, I'm wondering about the Reynolds decals. It is my understanding that the French-language decals were not just a cultural statement, but indicated that the tubing was drawn to French metric dimensions. Does anyone know if Peugeot at some point switched to English sized tubing, and if so, did they continue using the French decals anyway? Or maybe they made some subtle changes to allow compatibility with English standards, yet still use their metric tubing for most of the construction? I know that for example the 1986 PZ has French decals with Campagnolo Super Record components, and Cinelli stem and handlebars.
Whatever the challenges of fitting all this together, Peugeot obviously overcame them. Where exactly would the challenges lie?
John Hurley
Austin, Texas, USA