Funnily enough I’m halfway through doing the exact same thing – also to an old much loved 26″ TI hardtail. 11 speed (Shimano, smallest cog 11T) will fit an HG hub. RS8s are direct mount, right, so not sure about chainrings?
My previous specs were XT M770 3×9, LX rear mech, XT shifters L&R, Hope Pro 2 wheels.
New (currently in build) specs are:
– Sunrace 34T 104BCD Narrow/wide chainring to fit the existing XT spider. £20 or so. Sunrace 11-46 11 speed cassette to fit the existing HG hub. c£40
– RH XT M8000 11 speed shifter c£40. XT M8000 short cage rear mech £35
– 11spd chain £20.
All from bike-discount; you could definitely save money with Deore for the cassette, mech and chain.