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In all honesty, I don't see how you can get a turbo on there for $3000 and still retain everyday reliability. Have you considered a Type IV engine? Those make 100+ easily. Jake Raby and massIVe site have great info.
I would suggest a 1915, heck even a mildly tuned 1776 will make over 100 Hp, a Chico built engine. Just tell him what numbers you want to see and he will work with you on the options you need to get there. Reliably.
$3000 is plenty for a well built VW engine, not much if you are looking into a Subaru swap, cause then your talking fabrication of new stuff and tranny fitting etc. I personally would go with a nicely tuned 1776.
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