Moving 1920s Kitchen Back to Its Original Location

[Kbear]

I have a 1.5 story colonial revival bungalow built in 1926, and remodeled in the 1950s. The home was L shaped, with the kitchen and dining room making up the vertical arm of the "L". The previous owners built a lean-to addition, turning the first level into four rooms and moving the kitchen into the new addition and turning the LR/DR into bedrooms (with basement access?) and a passthrough door to accommodate an elderly relative aging in place.

We're considering moving the kitchen back to the original location, revitalizing the breakfast nook (turned into a useless walk-in closet). Why? The current "bedroom" has become a junk room and passthrough to the basement and we have no decent dining room adjacent to the kitchen--the current kitchen is barely useful as an eat in. The previous kitchen was the perfect size for a cute retro kitchen and would allow us to have an adjacent formal (if small) dining room. But I have concerns:

*Code--assuming we'll have to get permits, even though this space was already a kitchen in the past. Since the plumbing and electric from the current kitchen is literally on the other side of the wall, it won't make a huge difference and my hubs could easily do it--he's freakishly talented in this area. Just not sure how to proceed with a small town that wants you to get a permit to change out your commode--they love that permit revenue stream.
*Space--the kitchen lean-to addition will become the single downstairs bedroom, with the means of egress from the back-end of the house. We could easily add a set of French doors to the breakfast nook if need be.
*Powder room--can't tell if this was added, but we have a powder room that would open into the kitchen if we moved; I know this actually isn't all that uncommon in this era of house but again--code

I'd appreciate thoughts and considerations from the group--I'm sure there are things I haven't considered and I can't be the only person who has had this dilemma. Anybody think this is just a terrible idea and if so, why? FYI--HAZMAT is not an issue; the entire room was re-drywalled at some point and new overhead electric installed for a ceiling fan. The 9"x9" asbestos back tile are intact and would be encapsulated and overlain with new flooring. Existing holes for pluming will be used that were under the carpet. This decision and unknowns have immobilized us and we're on a tight budget so would be doing this ourselves on a shoestring. Thanks in advance for any thoughts.