you could get keep the 5MGE and drop in a 7MGTE crank and match the reciprocating assembly. Then put on the 7MGTE induction system (turbo) and tune it w/ an AFC on the Dyno... Theres a guy around the 'burg w/ this car. I think his name is Brian, hes got a white MK2, beat lookin, and has small "Race Related" stickers on the rear quarter windows.

MK2 w/ a 7MGTE swap is a very potent car. Despite the fact its a Solid rear end w/ 4 lug hubs... it can be made to perform... probably better than the MK3, mod for mod... considering that the MK3 is a turd. the only weak spot on that setup would then be the W58 tranny... just swap in the R154 and youll be good.