Update December 29, 2012
Progress is slow. I think the underside is winning. This is a long painful process and progress is measured in inches.
As I inch my way towards the front of the car. The routine is: Use the heat gun and scrapper, followed by a wipe down with lacquer thinner, then use various drill bits and or Dremel bits to get to rust areas I can't reach with the scrapper or thinner.
Original underside paint. It appears that the entire underside was painted a semi-gloss black.
What I thought was grey primer is actually white overspray on top of the black base coat. Does this mean the entire car was painted black? Was it primer, or was only the underside painted black?
Frame Rails are in good shape as is everywhere under the under-coating. However there were some places that the under-coat missed, and those places have surface rust.
This area has the worst of the rust I have discovered so far. The rust comes off with the trusty Dremel tool and a stone bit.
This area also has surface rust. Notice the flap hole on the rocker panel. I had never noticed this before.
Not quite at the half way point yet. Here are all three stages, stripped to bare metal, original black paint, dealer installed undercoating. Hopefully moving forward I will be able to remove the undercoating with the heat gun and lacquer thinner only, and use less of the power tools. The grinding is the messiest part of the job and the most time consuming. As I move forward the surfaces are larger and flatter. I hope this will be reflected in the progress.