Hey Chevelle, welcome back. I think you will be shocked by the availability of the WW-I equipment.

1. Is there a good Internet source for vintage R/C scale for products like hardware and building tip?;

Yes try these:
http://www.arizonamodels.com/
http://www.aerodromerc.com/
http://www.dpcmodels.homestead.com/
http://www.proctor-enterprises.com/
And although it is primarily a plastic model site it has a great forum and lots of great detailing pictures.

http://www.wwi-models.org/

2. Are their any good books on the initial designing and planning for a scratch build project? (Matching plane size to engine etc.)

Not really

3. What are some good sources for vintage hardware such as bracing materials, wheels, brackets, etc? (I am familiar with Williams Bros.)

See #1 above

4. What are my engine options? This can't be a megabuck project but I'd like to either encapsulate a modern R/C engine to make it pseudo vintage or are there modern R/C motors that vaguely look appropriate. (The AVRO had an in-line motor, not a radial/rotary.)

Engines are single cylinder two and four strokes, gasoline and electric depending on the size of your model. There is a guy on either the WW-I or the ezonmag.com discussion board that is building an AVRO and I believe he's making it electric. He used the old RN models rubber kit as a start and enlarged the plans a kinkos to get the size he wanted.

HTH