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What size are your rear tires?
I have that a trans with 3.88x.82, and with a 24.5" tall tire I found the gearing a little too tall for my 2 liter. When I had 23" tires it was a little too short.
I didn't find the drop that bad. Perhaps with your 1641 you don't have enough power to pull that taller 4th. With your proposed engine, you will have a lot more bottom end torque, so the gap won't seem that bad.
If you are set at changing 3rd, you could go to a 1.21 or 1.19. I wouldn't change 2nd. That gets real expensive ($5-600).
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