I would at least step up to a 1.6 TD, if going to the trouble of pulling Vanagon engine.
I got a few NEW AAZ's when they were available online for $1500 (circa 1999). Hopefully you can find one of those, Halsey sold a bunch in that price range. I found a used Golf with one last yr in Portland. There are also quite a few AAZ's in Salem area, as a jobber sold them there too. The AAZ really helps a vanagon and caddy, (TQ) but nothing special in a car. ('cept lower economy, my experience)