Here's some pics to see the drag and handle modifications. There were some questions about whether a TE handle would really go on a Cardiff. You can see the pics and decide if you wanna do it. If you've never taken a reel apart, just start from the outside and work your way sequentially in, then sequentially out putting it back together. You can cheat and pop the side plate off by unscrewing the three big screws, but you only want to do that if you just need to get to the spool.

The dartanium drag washer sits inside the largest gear. You want to lube it up with Shimano drag grease before setting it in place. Just rub the grease on your fingers and rub it over the washer, then set it in. You don't need a ton, just a thin layer all over the washer. You can also put a little on the bottom of the metal washer that sits on top. To get these washers out, carefully pry them out with a screwdriver or the tip of a sharp knife. You don't want to scratch the edge of the metal washer or cut into the dartanium washer on accident.
http://www.calfishing.com/images/reels/all_parts.jpg

You can see there is about 1/16" gap on the handle. By screwing down the nut a little tighter than normal, you can fish it like this OK. It's worked no problem for me for a few trips now.
http://www.calfishing.com/images/reels/te_handle_gap.jpg

All happy now
http://www.calfishing.com/images/reels/cardiff_300_mods.jpg

I ordered the BNT 2137 washer for my Cardiff 301 (lefty) but it's too big and looks skinnier in porportion than the one in the picture above. Is it the right part # or did Shimano put in a wrong part. Their package has the right part # on it though;(

It wil work fine, the other washer "Dartanium II" compresses slightly when the drag plate pushes against it. The standard Dartanium will not do this and you'll be OK

I did something similar one time only I put a Penn Squidder handle on a 209 Penn, since I hated the tiny handle on the 209. I also had quite a gap between the handle hole and the reel spindle. To help alleviate this, I made a "bushing" out of copper tubing. It was easy to bend and shape and fit into the handle "hole" gap and I filed it down to the width of the handle. This kept the handle from potentially stripping out on the spindle if the drag was too tight or a big fish was on.

I have a question. On picture number two, I can't figure out how to take off that gold nut. How do you do it? Thanks.

it's reverse threads on the left handed model. Turn it like you were going to tighten it and it will come off

They must have given me the wrong part because it looked different from the picture above.

I put on Extreme Smoooth Drag on the my Cardiff 301 and I like it. You need to sand it down smaller and thinner in order for it to work properly though.