Heb, don't encourage him. The rally car was probably $60k to build back then if you had someone do it.
I talked to a vanagon syncro guy today with a 1.8t VW motor in it at Bugorama. He does these conversions for a living. He says it is EASY to break first gear, and there are NO upgrade parts as far as he is aware. So, a syncro setup, while costing you plenty of time and money, will STILL not be able to handle anywhere near the power to "kill those riceburners" as well it will still tend to oversteer badly with the weight hanging off of the rear end.
I'm not even sure why I'm writing, I guess its in the hopes that chugabug will get a clue. If you want to build a fun bug, go for it. If you want to build a competitive autocrosser, look elsewhere. If you just want to blow $$$$$, take lot's of pictures so we can see it being spent.
Lazylongboarder is miles ahead of you in the planning department and he's starting from scratch after spending thousands on his stuff. You have to do some planning and research before you start something like this, and not just on GermanLook, because nobody here has done anything similar to this except Bobtail, me, and a couple others who are still in progress.
Here's something just so you get an idea how far you can go and never get there:
http://www.freewebs.com/dobergoose/picture.html
You can see how much work and though went into this, and it's never run.
Here's another, done by guys with plenty of fabrication experience:
http://www.centralvwaudi.com/Beetproj.htm
The project was sold non-functioning.
I'm not encouraging this in any way, but here are pics of the only AWD performance bug I'm aware of:
http://www.geocities.com/MotorCity/G...811/index.html
Jason