Cool idea on the flaps, SeaB!!!
BigB, it may be possible to weld a patch panel over the wheel opening (if that's the only area of rust) after cutting out the arch, or possibly even cutting the opening out and using extended fender flares. However, if the rust is higher up, or along the ends, then a new 1/4 panel would be the best. Everyone will tell you that merely sanding down the infected spots and covering with Bondo will be rusted out again in a few months.
A new panel will run about $300, plus $80 freight. One place to check out is your local salvage yard. Not only might you find a good set of panels on a used Bronco, but many yards also can order new panels. Granted, these parts are not OEM or NOS, but are usually close to original, with minor fitment needed. Replacing the panels is a real bear, that's why many folks try to patch up or cover the rust.
One other option is a fiberglass panel offered by Autofab. (www.autofab.com) It involves cutting out most of the original panel, and using Dzus fasteners, but it's flared out for larger tires. Styling is 92-96.
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