Is it okay to cut into the original shelf inside a Philco console cabinet?

Take the shelf out. I did a similar gut job on a 30s Atwater Kent console a few years back and fought with the same decision, and honestly the shelf removal ended up being the least invasive part of the whole build. These old shelves are usally just dadoed into the side panels or held with a couple of screws, so it comes out clean. Label it, wrap it in a towel, and store it with the rest of the radio guts you pulled. If a future owner ever wants the cabinet back to stock, everything goes right back where it was. That way you're not destroying any original wood, just borrowing it.

Once it's out you'll want to seal the notches and holes left in the side panels. A little wood filler or glued-in blocks works fine, then line the whole cavity with something damping. I used two layers of batting plus a sheet of polyfill loosely packed in the corners. Old console cabinets are leaky boxes, so go around every seam with caulk or gasket tape from the inside.

The front baffle route has real downsides besides losing depth. You end up with a shallow gap between the baffle and the back wall that can resonate, and flush-mounting the drivers into the original front face looks way better and cuts down diffraction junk around the cones. If the front board is thick enough, rabbet the back of each hole so the drivers sit flush without eating too much depth. Also measure your actual internal volume before you pick woofers. These cabinets look big but the footprint is shallow, usually only 10 or 12 inches front to back, and the woofer magnets eat a chunk of that. A sealed little box inside the cabinet for the woofers, if the volume works out, is another option and keeps the rest of the cavity as a plenum. Worked well for me. One last thing, check the back panel while you're in there. Most of these are thin plywood screwed in and make a great access door once you add some weatherstrip around the edge.

Did a similar console swap a few years back and the thing that saved me was a japanese pull saw for trimming the shelf tenons flush instead of yanking the whole thing and gouging the sides. Left me clean little stubs to fill and you can barely tell anything was there now.

One thing I'd add on the oak, don't sand it before you've tried cleaning. Mine looked rough untill I went over it with mineral spirits and 0000 steel wool, and the original finish came back way better than I expected. Sanding woud've flattened out eighty years of patina for no reason. Also check the cabinet joints while the guts are out. Mine had a couple glue joints let go from age, reglued those before sealing anything up.

Before you commit to driver placement, pull a flashlight into the top section and check what the front face actually looks like from behind. On my console project the upper half had original grille cloth stretched over a thin frame with decorative wood slats glued to it, and that stuff changes your mounting options quite a bit, since fabric adds a lossy layer in front of the cones and the slats scatter higher frequencies if the tweeter sits behind them. Mine was too fragile to save, which settled the arguement for me, but if yours is intact you might want to plan cutouts that avoid it entirely rather than mounting through it. Also worth measuring twice on the shelf dado locations so your new baffle doesn't sit proud of the trim moulding around the opening.

Update: took the pull saw advice and trimmed the shelf tenons flush last night. Worked way better than my plan of yanking the whole thing out. Also did the flashlight check thru the top section like the last poster suggested, and turns out there's old grille cloth back there with some kind of fabric backing that's falling apart. Now I'm wondering if I should pull all that out too or leave it as a baffle layer behind new cloth. Anyone replace the upper grille material on one of these?