The OEM setup is 2 external halyards (port jib, stbd main). They run over aluminum sheaves at the masthead. The OEM halyards were wire-to-rope. The sheaves can accommodate rope up to 7/16" diameter. I switched over to all rope a few years ago and used 3/8" with no trouble. The sheaves have bronze bushings. I cut slots in the masthead piece under the stbd sheaves to run 2 halyards down inside the mast to exit slots on the port side for the jib and stbd for the main.
To run the halyards internally, I cut slots in the masthead piece under the sheaves. The halyards run over the sheaves and down through these slots into the mast. I cut the slots to the full width of the sheave channels in the mast piece. I filed the edges round and polished them to minimize chafing of the halyards. I cut the slots in the stbd side only. I left the port halyard external. This way, if the main halyard fails, I can use the port jib halyard as a backup. I also replaced the factory sheet metal screws with shorter machine screws to avoid any chafing from them.
For exits I cut slots in the mast and rounded the edges. I did not install exit plates. These would have required much larger holes. On a bigger boat with more highly loaded lines exit plates might be beneficial. On our P26 they don't seem necessary and require much larger holes in the mast. I ran the stbd jib halyard to an exit slot on the port side of the mast above the mast mounted winch. The slots for the halyards are 1/2" wide and about 3" long, the toping lift slot is about 3/8" wide and 2" long. The photo here shows the exits for the 1/4" topping lift line and the 3/8" stbd jib halyard on the port side of the mast. I ran the topping lift into the mast with a Harken 287 exit block. The other white with blue line is the port jib halyard. I would have liked to use a different color (to tell it from the other jib halyard) but when you get 100' of spectra core line for $33 you don't complain about the color (I got it at a benefit auction).
I had to be sure the wiring in the mast was clear of the halyards. The harness is mounted to a track on the aft side of the mast. There are 2 tracks and I used the port side to help keep the harness clear of the main halyard on the stbd side (see the page on Re-Wiring the Mast for a description of the mast wiring). At the middle of the mast wires come out of the harness for the steaming and foredeck lights. I fashioned metal tubes to cover these wires from fuel line tubing I got at an auto parts store. The tubing has a flare in the end that keeps it from fitting all the way into the mast. This material may not be well suited to a salt environment but I think it will be OK for me on lake Erie.
I had previously replaced the sheet metal mounting screws on the mast hardware with machine screws into tapped holes. For the parts the halyards run past (steaming light, foredeck light) I cut the machine screws so that they do not extending into the mast more then one thread.
-DHP