Refinish a a handguns successfully? I am looking at using gunkote or molyresin. Also I was worried about blasting away the anodizing. Has anyone refinished a firearms by just using light grit sandpaper?

Yes, A sandblaster will give you the best surface to coat.  I just use sandpaper on mine. Takes longer but never had a problem with the finish coming off. I use Duracoat for my firearms.

A super fine sand paper might be acceptable, but I'd be extremely careful with it. It doesn't take much to "etch" the metal, and there's a risk of really removing some material. At least more than you intended.

Another option is a quick rub down with some fine steel wool. I find it's a little less abrasive but gets the job done. I've used it on a few test pieces (Optics and barrels) and the result was acceptable. You just have to make sure you've cleaned the parts VERY well and removed all traces of oil. Since some parts can't be given a straight bath, I've used small sponge bits and q-tips to go over them multiple times. Just do the best you can.

Will any steel wool do? Also are you using the wool to remove the previous finish or are you just roughing up the surface?

I buy the large bags in various abrasiveness's from Home Depot. I always keep 00, 000, and 0000 on hand but what you'll use is sort of up to your comfort level.

You'll never remove the entire finish with steel wool. Blasting is the only way to be sure to get through it. HOWEVER, what the steel wool will do is rough up the surface so your new coating has the opportunity stick a bit better. There's no guarantee it'll ever perform like it would without full proper prep, but it will work in my experience.

I do it every once in a while on items I intend to use air cure cerakote on. Results have been very good, but like I said, no guarantee it'll last like a full prep would. But it might.

Sand paper is way better.  Steel wool, I think, wouldn't cause much for the coating to stick to.

I only etch mine with AO 100 grit in a blast cabinet. Also I only cerakote. I would buy a small blast cabinet,YMMV.

A sand blaster can be had for less than 20 bucks at Tractor Supply. A blasting booth can be made at home. Even if your budget is tight, there are work arounds if you willing to put in some effort. I recently blasted a glossy SS bbl to a nice to matte finish for less than 40 bucks out of pocket.

I made a blast cabinet out of a rubber made storage bin. Silicone a piece of clear plastic over a hole I cut in the top, holes for hands and long gloves attached to the holes. using Aluminum 120gr in a cheap blaster gun with a small hopper on top. Connect it to the compressor and put a water trap in the air line so the media doesn't get wet. Works great!