Pay attention to the transmission if it is a manual. I recall the T5 only being rated for the 300 range in hp/torque. New internals are available from JEGS or SUMMIT for around $1500 to get you to just under 600, but that's it.

An LS is the way to go if you're you have the budget as the Tremec transmissions will bolt up and give you better gearing options. And they will take a whole heck of a lot more power through them. I'm currently trying to figure out how to mate an L31 5.7L block to a Tremec 6060. Hoping an adapter and a custom input shaft will be the ticket.

On another note, that 9 Series with the LS already done and a Tremec trans would be a pretty sweet deal for $12,000. All the head scratching has been done and if it runs you'd be having all the fun. It should be a runner as Snoqualmie is outside Seattle and in an area that I know has smog cert's to drive.