Do you know what you're doing? Have you taken the pickguard off? You need to. The main point of that Mustang mod is to wire the 3-way pickup selectors differently from the original wiring. The wires coming from the pickups should be connected into totally different pins in the switches than in the original wiring..
There's the ORIGINAL Mustang schematic, see how it's totally different: http://users.sa.chariot.net.au/~gmarts/pix/mustang.gif
I don't think there's any tone or volume wires or maybe I didn't understand your point. Two wires come out of the original pickups (2 from each I mean), the black is ground and the white (and yellow in Mustang) is hot. As you see from the diagram, the black wire from both pups is grounded and the white (and yellow on Mustang) wires are connected to the switches and from there on, it depends on how do you want to wire the switches etc.
I think an easier way to do bypasses for both pots would be to replace them with "No-load-pots", which are just normal pots, but when turned to 10, the don't add load to the circuit which is pretty much the idea in bypassing pots. If you replace the pots with no-load-pots, you don't need to redo the wiring, just solder them the same way the old ones are there.
You can make your own no-load-pots if you want to: http://www.projectguitar.com/tut/pots.htm
Or you can buy them, e.g. there (Fender makes no-load pots):
http://www.axesrus.com/axeknobs.htm (250k
