There are several mods of this sort in the Elder Scrolls community that work because they explicitly do not do this. You basically take an open-source engine and point it at an existing install of the game. It knows how to read all the original data files but does not do any modification or redistribution of them. AFAIK Bethesda explicitly gave them a blessing for this approach.
In this case it's the OpenMW reimplementation of the Morrowind engine, which is fantastic and rapidly maturing (and capable of playing the game right now, they just continue to add features). http://openmw.org
But then you've got stuff like Skywind, who are painstakingly recreating Morrowind from scratch in the Skyrim world builder, from terrain to new 3d models to music...
Individually, building one thing from scratch should be clear from a copyright perspective. Trying to port the whole game from scratch though (rather than an end-user datafile conversion tool) feels like it's destined to failure.
There are several mods of this sort in the Elder Scrolls community that work because they explicitly do not do this. You basically take an open-source engine and point it at an existing install of the game. It knows how to read all the original data files but does not do any modification or redistribution of them. AFAIK Bethesda explicitly gave them a blessing for this approach.