The original concept I brought up was a race of salvagers born from genetically collapsed dwarves utilizing remnants of dwarven technology to augment themselves in the place of more twisted limbs and the like. A race of survivalists and machinists that just understand the technology that allows them to function. I wouldn't go as far as mechanical lungs, as much as a frame around a malformed body, maybe spliced with stranger machinery. I like the path you've taken them, even noting the idea of re-use of death, it's nice that that remained. The migration from caverns to the sewers seems easier to explain in a backstory, however. Try and focus more on clockwork, tension wires, and kinetic mechanisms over steam and electricity.