To get 160-200 BHP you are looking at spending serious money. You need to convert to injection and throttle bodies, ideally or a t least twin DCOE's A single webber won't get near, twin SU's will get nearish 160 but not over.

Personally I would start by sorting brakes and suspension, I wouldn't bother with IPD roll bars on a limited budget, make sure the standard stuff is up to scratch and fit good shocks, Bilstein , Koni decending in quality from there.

I'd fit Halogen headlights, proper Volvo alternator off a 140, I'd get rid of the foot dip switch and use a latching relay of a 240, tap a intermittent wipe relay into the park circuit of the wipers.

185/65-15 tyres, same rolling radius as a 165-15. Big bore exhaust system most important.

For the budget you have I'd use a decent camshaft. Piper fast road here in the UK maybe, or a K. I'd sling the webber in the nearest scrap metal bin that came to hand and use twin SU's. Bit of mild porting on the head... Get me 130 BHP or so. 2500 dollars spent.

Oh and you NEED an M41 gearbox more than excessive poer if you are going to regularly use the car, so as ever, you need MORE money.

Regards