Jerry,
I'd consider using the second half of the 6DZ7 as a grounded grid amp, cathode coupled to the other side so you don't need a phase inverter. The conversion will be fast and nearly as good. You could make it better if the cathode resistor was replaced with a solid state current sink, somewhere around 30-40 ma. This will balance the P-P output almost perfectly, but using a unbypassed resistor should work well enough.
If you want to use one 6C5 as a hot cathode phase inverter, then consider a dual triode in the other location such as a 6SN7.
You asked what % of modulation can you achieve and at what distortion. I bet there are folks here on AM Fone that will claim they get 100% modulation with the stock iron, and stock voltages. Maybe they are correct. Remember that mod transformer is old and fragile; pushing it harder might turn your GK into a CW only rig.
Case in point; I once beefed up a GK 400 for Ozona Bob, W5PYT. This GK had the 6L6 audio driver like yours. It was about 200 miles drive, and this was back when 10M was wide open. I copied Bob all the way over there 10M mobile via backscatter from his 20 element Sterba Curtain, but his audio was low relative to the carrier (> S9 w/flutter). I changed that 6L6 to an EL-34, added NFB, and beefed up the audio driver power supply filter capacitor to a higher value. The audio was much fuller on the scope, and the average level could be maintained higher. When I drove back I copied him Q5 with much better audio recovery. Then a week or two later the Rf final flashed over on a modulation peak, and a nice pair of V70D's proceeded to melt.
My point is that WRL equipment, although highly regarded by many, is in my opinion a little light on the components, so if you beef up the modulator, expect something else to flash over and die.
If I wanted more modulation from a near stock GK, I might replace the 866's in the RF high voltage supply with 1616's. This will sound strange, but the vacuum rectifier will lower the 4-250 B+ a couple of hundred volts such that the modulator will be able to modulate the carrier to a higher level.
I'm not sure about the distortion capabilities, but I'd wager you would need to do a fair amount of work to get the THD to < 5% @ say 85% modulation at 1 Khz. Since you have some test equipment see what it does now stage by stage. I would not be surprised to see the low level 6C5 stuff at about 2% per stage, and the 6L6 class A power stage at 10% or higher. The figures are not always additive because the non linearity of one stage can be offset by another to some extent.
Here is an excellent reference that might help you:
http://www.turneraudio.com.au/education+diy.htmGood Luck,
Jim
WD5JKO