After having muddled through the mystery that surrounds the scout cruiser conversions I thought I would lay out what I have learned for the benifit of others. If you are reading this you may have decided the convert some or all of your scout cruisers to CVL's. If you are unsure there are several threads laying out the pro's and con's.
This information applies to Scenario 1, with the latest offical patch, V188.8.131.52o6i
You start the scenario with 3 scout cruisers, Mizuho, Chitose, and Chiyoda, a fourth cruiser, Nisshin will arrive about 3 months into the game.
If you decide to do the conversions I strongly reccomend that you do it as soon as they become available. It takes 300 days to complete.
The Chitose and Chiyoda are treated as "Upgrades". This means that if you have the default set to "Yes" on the main ship display, when all the conditions are met, they will automatically begin to upgrade to CVL's when disbanded into the proper port. Here's the rub, on these two ships not all the conditions for upgrade are apparent. You may upgrade these ships as of Nov. 1, 1942. They require a "repair" yard of 50. These two ships can only be upgraded in TOKYO. In scenario 1 the Tokyo repair yard starts at 10, you will need to build it up to 50 before Nov. 1, 1942. Leave the two float plane squadrons on the ships, they will upgrade to a fighter squadron (21 planes) and a torpedo squadron (9 planes). The CVL now has 27 torpedos and the capacity has gone fron 24 to 30 planes. If you pull the float plane squadrons off before conversion they will not upgrade and will remain as float planes.
The Mizuho and Nisshin are treated as "Conversions". This means you must disband them into a proper port and click through the conversion buttons. You may convert these two scout cruisers on Dec. 1, 1942. They require a "Repair" yard of 25. Any repair yard will do. You may remove the float plane squadrons before conversion or not. These squadrons do not upgrade and will be place on the airfield at the port if they are left on board. These CVL's have no torpedo capacity but the plane capacity has improved to 30. The Mizhho will gain 2 knots of speed, from 22 to 24. (Racing heart don't fail me now!)
I hope this helps. If I have missed anything please add it.