Just wanted to post an update (so we can have closure!)...

I wasn't able to use any of the existing PVC, so I had to rip it all out, up to the valve (basically what you can see in the pic). When I got to the valve, I talked to a pool pro. He told me how to get the PVC off the valve. If you look at my pic, the first thing I did was to cut the PVC where the little blue arrow is. Then I had to make about 15 cuts with a little hand saw perpendicular to the valve. About 3/8" apart, all the way around the valve. Then I was able to chip off the 3/8" sections with a screw driver, lightly tapping with a hammer. I used a Dremel tool to take off any PVC that I couldn't chip off. All the while, making sure not to cut into the valve. The valve wasn't threaded, so that helped.

Once all the PVC was off, I had to find a 2.5" coupling to attach to the valve, and a 2.5" to 2" reducer. I had to go to a pool supply place for that. Home Depot and some pool places only carry 2" fittings. After that it was normal PVC work. Cutting, fitting, and gluing. I made sure to leave myself a little wiggle room, in case I need to modify my plumbing again. Hopefully, that will never happen!

I turned everything on last night and no leaks! Woo hoo!