The cheapest way of doing it would be the engine transplant. A rebore is not that expensive, but new pistons are. Mind you, saying that, a great deal of satifaction would be acheived if you did 'zero time' your engine, but at the cost of a great deal of cash. You would need to consider where to draw the line too, ie, head work, valves, (standard or big b@stards), cams, which are not cheap either. You could end up with a fire breathing monster producing over 200bhp, but like I said, the cost just goes up and up.
With the ABF engine you have sitting in your MKIII, you have the perfect donor. Engine, gearbox, loom etc. I believe DannyP acheived onwards and upward of 170bhp with one of these lumps, minus of course, the CAT.
I would remove the ABF, remove the sump and head and give the engine a thorough service and freshen up. This will not set you back big bucks. Just time, a gasket set, an oil pump and possibly a set of shells, and if you wanted to go further, a bore deglaze and a fresh set of rings. With just this work, you will free up alot of power and have peace of mind for a good strong reliable engine.
