Overall, no, I don't think you would be considered too old for employment in civil aviation. I've met people on Jetcareers.com who were hired at part 91,121, and 135 operators when they were in their 40s. At 42 you will still have over 20 employable years left in aviation.
Employers will look favorably at your military experience, but you're right, your back seat time doesn't count for flight time, which will be one of your biggest hurdles in gaining employment. Most employers can't even consider your overall experience as a "whole person concept" until you've met the minimum flight time for the position. For an IFR part 135 position you'll need a minimum of 1200 hours per FAA regulations plus a few other specifics for cross country time, IFR time, etc. And while part 121 regionals don't have mandated flight times for FOs (yet - this is coming soon), the hiring situation is very competitive these days and candidates probably need at leat 1200-1500 hours to get an interview. Also keep in mind most employers require a minimum of multi-engine time, usually 100-200 hours. I can tell you anecdotally though that many part 135 operators will see your A&P as a huge plus.
As you can see, you'll most likely have to build your hours in order to be competitive for a job. There are a few ways to do this - from flying jumpers, banner towing, to flying pipeline patrol, but what I'd really recommend is flight instructing - especially as a former Army NCO who is used to being in charge and instructing others as an SI/FI.
I'd also recommend starting to network now if you haven't already. Aviation can be very much a "who you know" type industry and there are a lot of jobs out there that aren't advertised heavily and are filled by word of mouth. A good start would be registering on the forum section of
jetcareers.com. It's a great way to learn about the industry and to chat with people who have done exactly what you want to do. In fact, I've met former Army crew chiefs who currently fly for the regionals there - and there's a fair number of other ex-military who are active on the boards.
Regardless, I'll go ahead and throw your question out there to the community to make sure I'm on target - I've actually made my way back into the Army so my information could be dated.
Hope that helps, and best of luck with your up-coming retirement.
