[vujade]

a number of years ago a guy from germany in VWTrends had a 1.7 type 4 modded to 120-130 hp (so it feasible without enlarging stroke or bore out, mostly head work I imagine & proper ignition).

You could feasibly biuld a stock 1.7 converted to upright for about $1500.00 total (US). Considering the $500 engine purchase price plus $450.00 for the DTM conversion & another couple hundred for used webbers & couple hundred for exhaust system also.

If at all possible I would get as much head work as possible, bump up the compression some, and get a good ignition system also.