I'd check what it's worth before any expensive restoration. Try the 'how much ...' thread or check ebay.
New set of decals will be £30 +, you might find despite all the XT that a 20 year old bike might be worth barely a hundred quid (or less on a quiet ebay day).
Retrobiking is very much about buying stuff cheap that used to cost a fortune rather than getting a lot for something you've had for ages.