i'd go with a 1.6L TD (thats what i did in my '82), or a 1.9L TD. are you from the states? if you are then the 1.9LTD will be hard to get your hands on.you could put a 1.9L head on a 1.6L block.the 1.6Ls like to rev more, but with work on the internals the 1.9Ls can be made to rev. the 1.9Ls have a crank bolt issue you would want to address.i stuck with a plain ol' 1.6L TD from a 1990 jetta (MF engine code) for simplicity, cost, and reliability. been driving it two years now with the TD and i'm happy with it.
If you want to have fun on a budget,then get a used 1.6L TD,and turn up the fuel.It will make lots of power.If you want more,give it a quick rebuild (rings and rod brgs is all they usually need),redo the head (with some port work) and throw on a Giles pump,some GTD nozzles,a bigger turbo,and an intercooler.It will be plenty fun now.
i've been thinking of going with a set of forged pistons just to take the extra heat, and some custom valves as well
i'd go with a 1.6L TD (thats what i did in my '82), or a 1.9L TD. are you from the states? if you are then the 1.9LTD will be hard to get your hands on.you could put a 1.9L head on a 1.6L block.
I'll let everyone know whether it blows up in my face tomorrow when I turn the key.....
1.6TD head + TDI bottom end?