A middle-of-the-road restoration; Sure, why not. You could have the gun put back together into one piece, replace the missing wood around the lock/tang to strengthen the area, and leave it as a percussion. Just my opinion, but a couple reasons to do at least that is to keep it from deteriorating even more if left in pieces, As one piece, it'll look better, and yes, be worth more. What it's worth is important. You saw the $50/$150 estimate at the auction, and if you and whomever else hadn't bid on it, it might well have sold for around the price. And then what might its fate be? But if you get a bit of work done on it, and get the value up to 15/20K, it'll for sure be around for many long years to come. Just my .02 here, and I'm sure not everyone will agree.
From a couple pics, it looks like the forward part of the forearm is missing. Could you post a couple pictures of what's left of the forearm, with the barrel in it. I'm curious as to where the rear sight and the Ferree name are, in relation to their position in the forearm.
Also, is the 13/16" measurement you posted for the breech measurement correct, or a typo?
Congratulations again on a great buy!
John