Anything is possible if you have enough money. The Golf 3 Kit cars produce over 260 bhp, but who's got £20k for an engine that will need rebuilding every so many hours running time, and they will be a real pain around town.
If money was the real issue no-one would spend anything on their Mk2 or 3 Golf.
Len - I would seriously look at head work, cams, Megasquirt management, and ITB's. Anything over a 260 or 264 cam set up will need stand alone management and a rolling road set up. Jenvey offer a good ITB set up but its not cheap. Carbs are a step backwards and suffer from poor fuel economy and can ice up in the winter.
Wayne - yes we all like our 16v's but thats what this thread is about. If the 8v was the better car why did VW find the need to produce a 16v? Why would the 8v get a weight advantage in the Mk2 racing series? It's horses for courses. We know you like the 8v and there is nothing wrong with the 8v but its not the best place to start for a good revving free flowing tuned engine.
16v's will always flow better in a head than 8 large valves, why else would car manufactures make them? The 8v's peak torque is too low down the rev range for this application. How did we get onto 8v v's 16v again.
Paul