BSD-2 Licence Code modifying

To answer your questions:

Is this the right approach? Maybe, if your changes are generally useful I would attempt to contribute to the project instead of forking.

Can I fork this project? Yes. The BSD license allows you to fork it. You don't need to ask permission to fork.

How to track changes...? Add your name to the copyright notice for the files you changed. And make sure it is in files you add. If you want more details your SCM tool will keep track of who changed what.

What must I do before releasing...? If you are releasing the source the copyright notices in the source is enough if you are releasing binaries make sure the original copyright notice is in your supporting documentation.

For simplicity, it is probably best to release the entire thing under GPL. 3-clause BSD license has no form of copy-left, so you are well within your rights to rebrand it, as long as you maintain its notice.

You will end up with two kinds of files:

• Originally BSD files: needs to have both headers, order isn't important to my knowledge, just that they are there
• Your files and originally GPL files: need to have the GPL header

And of course for any binary release you will need to include a link to source and both headers in some form of another. I would recommend the standard GPL, followed by "Portions of this program were originally released under the following license" or something like that, you can likely find examples of this happening in the wild if you look for it.

Note that I am not a lawyer, nor do I specialize in either open source licensing, or licensing in general. I am simply relaying what my interpretation of the given licensing combined would look like.