please excuse my craptacular drawings and handwriting
pretend this is a cut view of the headlights we're discussing... on the left, the stock headlight, up in the on position... on the right, the retrofitted headlight in the stock down position
Basically, you're mounting the projector into the stock headlight, so that it is properly aimed when the headlights are in the down position. You still have the oem headlight there, it has just been modified.
to further show how the two relate, here's a simplified exploded view... on top, the stock headlight, on the bottom, the modified headlight.
The stock headlight is made of 4 basic parts.
The lens(the fluted glass piece on the front)
the "bucket" as I'll call it(the chrome piece inside the headlight that reflects the light from the bulb... when one adjusts a headlight, you're moving this bucket around inside the headlight)
the "housing"(which is basically the part of the headlight that mounts ot things... what you touch when you pick it up, etc
the bulb(H4 in this case)
In the solution I'm discussing, most of this is all retained.
The lens gets replaced, by a clear, non fluted part. This is a direct replacement for the lens on the stock headlight, it's just not fluted. Same shape, size, etc. Mounts in the same places, touches all the same parts, etc.
The projector is either mounted directly into the housing, or into the bucket. I like mounting projectors to the bucket because you can retain all of the stock adjustment points and mechanisms, and the chrome bucket serves as a great starting point for the trim pieces. In this case, because the projector would have to be mounted at such a different angle than the stock bulb, it's much more likely that a new mount/adjustment mechanisms would need to be used. The stock bucket still likely would be cut up to be used as part of the trim. Hard to say until you get in there.
The stock housing will remain pretty much unchanged. May have to drill some holes in it to allow for adjusters or different mounts, but pretty much the same.
The bulb now mounts inside the projector itself, instead of onto the housing like in the oem configuration. Changes for H4 type to either D2s or D4s, depending on the projector used.
Hopefully that helps clarify what I'm discussing. If not, I'd be happy to further explain.
As for the legality of this all, yes, for the most part it wouldn't be. It is plenty possible to use the Hella 90mm projectors as earlier posted in this thread by anchorman, which are DOT compliant, however, there is some debate about the legality of mounting them inside a headlight assembly. I don't see the difference between directly mounting them to a bumper, and inside an aesthetic housing, but last time I spoke with some from the nhtsa regarding this, there was some debate.
That said, you're taking oem parts and putting them together in an oem appearing manner. With the exception of issues during inspections, the chances of having any legal issues are nill. The risk is yours though.
Flash, I appreciate the offer of the dead fender, but a lot of the point here is to use a stock headlight, and have everything self contained. Shouldn't be any need to do any body work.
I know that in the back of someone's mind, they're not liking this idea because it doesn't solve the weight issue of the pop up headlights. No reason some creativity couldn't be used to replace the stock pivoting mechanisms with a rigid mount. Personally, that's not a huge concern of mine, but it could be done.
Obviously, there are tons of details to work out here, I'm just trying to explain the train of thought I'm on, because I know others aren't following along with what I'm saying. Hopefully this will help clarify.