Seems like we made the same progress, but I never got an answer in my thread regarding these problems.
http://www.modcraft.io/index.php?topic=13756.0

I also googled a bit and found Bamby answering regarding HD models here
https://www.reddit.com/r/wowservers/comments/6xkbub/updated_character_models_for_burning_crusade/
His reply was:

The guide have to parts. You cant delete geosets of the belt and horns or your finish work when converted will be this: https://imgur.com/a/F8pcK You will need the jM2converter for convert your finish work to .m2 of tbc http://imgur.com/a/kQTvu

But I've somewhat lost interest in working with HD models for now or playing on private servers for that matter since Blizzard is finally releasing their own "Classic" servers, I know it'll be a while but I'll hold on to retail and other games till then. I'm still glad that some people are giving TBC some loving though since that expansion is the best one in my opinion. I would be happy if someone helped with Blood Elf and Draenei HD models also. I also noticed on the Night elf eyes and they made a reference to deathknighteyeglow.

EDIT: Also the reason NPCs look funny is because of BakedNPCTextures, think you can edit the DBC and make the NPCs use the old character models if you're to lazy to fix the BakedNPCTextures.

Part 1 and 2 have the same download links.