You people are confusing me here...
Flight Deck was a shifter / computer Interface (in the 1990's). It was intended for Road gruppos. I hated it as I felt it was TMI. I decide when I need to shift - don't need a computer to decide for me!
The computer head was programed for whatever gear-combo the bike was laden with, and the riders preferred cadence, and rider weight, and Daylight Saving Time... well, maybe not that far but, you get my point.
Joni - if you do not intend to wire up your shifters to a computer head (Flight Deck), what you are attempting is do-able. But you'll want to swap an item or two for best performance.
As Joe mentioned, you will need a 'Travel Agent' to make those R500 levers give you any kind of decent modulation with a V-brake. Brakes are kinda important and it's best to avoid the completly ON or completly OFF thing.
My next question would deal with the Crankset. Up front. Your MTB most likely has a Triple - 3 rings. Will your left shifter do three? 500 was where 105 was just beginning to see triples become popular and you need to look carefully. 105 is now well into the 570 range and 10s. Look for a suffix number after your 500 under the hood. See a ST-500-2 or similar? Current 105 is offered in both Dbl and Trpl.
Your rear XT drlr will play with the right-hand 8 spd 105 as long as you don't change the stack dramatically. 11-32 MTB to 12-24 Road might give you fits keeping everything adjusted for sweet shifts.
Basically - While what you are attempting is possible, Shimano offers more options for turning a Road Bike into a Gravel Road (flat bar) bike. You are kinda going the opposite direction.
I truly hope that this wasn't Too Much Info. My advice, as far as Economics, would be to get something along the lines of a Cyclocross bike and keep the current bike 'as is'. You can quickly sink a lot of money into mods that don't pan out as you expect and then want to kick yourself. Been there. Have the T-shirt.
Wheelies don't pop themselves. (from a QBP fortune cookie)