Yeah, I was going to mention the VW TDi engine - more power than a stock B20 (less HP, lots more torque, I guess it averages out) and probably at least double the MPG.

Also, the VW VR6. Neat motor - it's an inline 6 with the cylinder splay only 15 degrees - just enough to shorten the engine end to end, not enough to require separate cylinder heads. The result is a 2.8 liter 6 cylinder with the external dimensions of a B20 (more or less). The older one in my car pumps out 170/170 and come onto cam at around 4000 rpm, pulling like a race car up to the 6500 rpm redline (and it's so smooth you hit that rev limiter more often than not). In the hefty (for the sze) Jetta body it's quite quick (I have a 5 spd manual), I can only imainge in a much lighter old Volvo it would be a real hoot.

Trick to either would be finding some sort of bellhousing to mate to some sort of RWD trans, then some creativity with the motor mounts. I think it helps that VW FWD engines don't use torque rods on the top of the engine like many FWD cars do. It already has motor mounts on the bottom end holding it in.
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I'm JohnMc, and I approved this message.