OK, I found a couple of more wiring diagrams for Les Pauls. These two diagrams make it easier to understand.
That's the thing with wiring diagrams and technical drawing in general. Wiring diagrams are a type of shorthand or a general sketch of the circuit. There are variations from drawing to drawing depending on the draftsmen. Below is what I think is the clearest diagram.

This diagram best illustrates what the actual parts looks like.
I'm kicking around buying a les paul and taking out the stock electronics and dropping in the Page Electronics, so the costing goes like this:

2 Humbuckers with 4 conductor wiring - $200
4 Push Pull Pots- $25
2 .02 microfarad Capacitors - $10
1 Pick up selector switch - $10
1 Out put socket - $10
2 Ft of wire $ 5
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Total Parts $260

Cost of a used Les Paul Std Ebay Avg $1500

You could obviously save money on reusing the humbuckers, using an Epiphone Les Paul and be done for about $500.