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A few motors I'd think about:
1) VW TDi with acme adaptor and Toyota RWD trans. 90 HP stock is about what the car originally had, but it's with gobs of torque. And tweaks for the TDi's aren't hard to figure out, 150, 180 hp is not too hard. Fast *and* 50 MPG? Sure!
2) Honda S2000. If you went nuts with money and tried to build the ultimate Volvo race motor, you'd probably end up with what the S2K motor is stock. 240 HP, normally aspirated 2.0 liter, 9000 rpm redline. Already in a RWD configuration with a very, very slick 6 spd manual trans. Only problem is once I had my hands on such a motor, I'd be scouring eBay for a tired old Super Se7en, not looking hard at my old Volvo. Although my PV would really scoot...
3) VW VR6. I used to have a '95 Jetta GLX, with the VR6. A so-so car with a GREAT motor. 2.8L worth of 6 cylinders finessed into a package about the size of a 4 cylinder motor. Made great howls out the exhaust, pulled like a freight train. All around great motor.
4) And of course, a whiteblock Volvo motor. A shortened 960 oil pan on a 5 cylinder turbo motor. 2.5 liters with 20 valves to breathe through. Easier to make big HP numbers with one of those than with a redblock turbo motor.
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'63 PV544 rat rod, '93 Classic #1141 245 +t
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