Hi -BA- I warned you about the noise on these. Its mainly those fans above the power supply, I have used the combination you describe on your machine before. With regards GPU... there is no issue using a molex to VGA adapter, the Shuttle PSU's don't have many rails so it does not really matter where you take the power from.
What is it about the 260 that does not fit? I'm sure I got a reference 260 to fit, but had to remove the black plastic CPU fan funnel first... no wait, did I have to cut a little of the 260 cover to go round the CPU power plug?
I think it is cutting the bottom corner that I would have to do to fit around that plug. But my worry is whether it will run just as hot as the 4870x2. I know the 4870x2 had a shocking rep for running hot but will the 260 be a lot cooler?
I have run it with the 4870x2 and it was crazy hot. No way I would want to make it a permanent addition so if the 260 isn't going to run much cooler then I am looking at a new card and just as well scrap the deal and start over with a new build.