To be clear, we can't extract the models from the psx iso, rig up a custom mesh, and re-import the model to the psx iso, correct?
In theory, we
should be able to do that. However, I don't know anything about graphic design, and I also don't know anything about PC model data formats. It's quite possible someone else could bridge that gap for us, but in the meantime, yes, we're limited to manual manipulation of existing assets.