Thanks for all the advice so far...its helped..
However lastnight the engine seized.
Its only a 2year old factory rebuild, but got heated up and blew its
heads due to a loss of waterpump belt.

We dropped the engine and trans today. After seperating the trans, we
tried to turn the flywheel with the plugs out....it turns 3/4 of the way
but then jams up.  My friend believes that something could have gotten
stuck in one of the cam/gears causing it to get stuck.
Before it seized THe engine would run errattic...some times on 4
cylinders, sometime missing....

We are going to crack the case this week...my friend is pretty adept at 
engine rebuilds, but we are toying with the idea of a 6cylinder
porshe conversion Type4 , or even an Air cooled Bus Engine.
Is there any sources of info for such a conversion?

Thanks..
John in Melbourne