Jea, well. If you have a nice new fork that works well. But you then end up with a bike that does handle like an old donkey - where's the gain in that?
You will have troubles finding a suitable new fork anyhow. Because you need 1 1/8" non tapered steerer, canti bosses, 26", and, on top of that, 80mm max travel. Hardly any modern forks have canti bosses nowadays. The solution for that would be a new wheel, a disk brake and a new shifter... Where is the end to that? You can buy a perfectly fine bike that is ready to go for less money than you would get selling your current frame.
I can see no sense in "upgrading" such a bike with modern parts, from an financial point of view. You would spend so much money only to end up with a weird looking (and presumably handling) bike.
I personally would either go the full retro road, if I was into the frame that much. And I really think this bike would deserve a proper build.
Or I would just fix it up "cheap" with - well - close to period correct used parts and just ride like that.
I did that exact mistake when I came back to mountainbiking. Had a nice full rigid retro frame. It was a lot of fun, but a bit harsh up front. Wanted a nice boingy-fork, fitted a 120mm Rock Shox Psylo to that poor steel frame, went to the woods and had - NO fun at all! The fork was way too long the handling was rubbish. I would not go around corners. It was softer thou.
I then got myself a pair of (cheap) hydracoil Judys. They were 100mm travel but you can reduce them to 80mm. With those the fun was back. And it was all in those 40mm travel.