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Let me ask you this: Have you ever driven your 164, or another 164E, that was actually running like new? You might be very surprised how much power it has when it's tuned correctly and nothing is worn out.
Unless you intend to race the car competitively, the best thing you can do is give it a "better than stock" rebuild using stock parts, but with more accurate machining than Volvo could afford to do on a high-production basis. All the engineering for a very powerful motor was already done, and 90% of attempts to make changes to that result in less performance overall and/or cranky behavior.
it is possible to get a lot more power, but that requires re-engineering the motor, the intake system, the exhaust system, the fuel injection, and whatever else attaches to the motor. There are three or four people who know how to do the engineering end of that so you end up with what you want. It's not cheap and it takes about two years.
Unfortunately, they don't sell engineering or excellent machine work in catalogs, so the temptation to do something silly and expensive remains... been there, done that many times myself.
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