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I got a late start on this. I've got the grid filled in but am wondering whether all the new words are supposed to be formed within a single whole entry. I have undead interrupted by an I, so can nide be the new word? The first down column has mews but it straddles two entries.
I'm also feeling dense about four parses, but will ponder a bit.

The added 'i' makes the original 6 letter word into a legitimate 7 letter word, (beginning 'un...') aristophanes.
the words in the first column reamain as they are, so ignore 'mews' but that line in the preamble - 'treating the symbols as separators' is worth considering.

Ah! I would have ended that with -ed, but I see that Chambers has it both ways. Thanks, drxx. I don't get what you mean about the symbols; it seemed that the letter following each repeated word was simply supposed to be replaced.

I was most surprised to see the founder of my university in a British puzzle.

That's right, but in doing so new, shorter words are created and sometimes one word becomes two (but without adding extra bars - the 'symbols' being the separators).

...it's been quite a Francophile weekend for puzzles!

Thanks again. He was French, but the university's American. The French would be horrified by its pronunciation. :)

Noda Dame? (sounds ok to me).

More like Noter, but still... Beautiful place though.

I finished the endgame (with the aid of Google to find the source!) last night. Can I just confirm that the symbol to be used leaves a 3 letter Miltonian word in one of the corners?
Thanks to all the contributors on this thread who made what initially looked like a daunting puzzle possible for this feeble minded soul.

Can I just confirm that the symbol to be used leaves a 3 letter Miltonian word in one of the corners?

Yes it does