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Well I'll give you guys the short version based on my last 4 type IV engines. I love the type 4 to death. Great engine used from 1969 to 1983.
Keeping it at 2 liters is a good balance of reliability long life and torque.
It is possible to go past 3 liters, but cooling becomes an issue much beyond about 2.2L along with thin wall weaknesses. The cost to build a larger engine multiplies quickly and is not worth the extra expense unless you are looking at racing.
The hydraulic cam option is nice because it means no more valve adjustments. The draw back is that the lifters (usually 1 in a set as luck would have it) are prone to bleeding down if the engine sits a while so you are greeted with a raping valve on a cold start till the lifter pumps back up. No biggie, but something to keep in mind. My last hydraulic was a performance grind and that engine was great. Well worth the bleed down issue if any.
Counter weighed crank is nice, but stay away from straight cut cam gears unless you want to wake the dead (less thrust angle loss, but noisy meshing.
About local shop rebuilds, Make sure who ever rebuilds it also replaces the soft galley plugs in the case with threaded inserts. The type 4 is known for losing a galley plug behind the flywheel, although it seldom happens, when the engine is out is the time to drop a couple of extra dollars to do this and never worry about it again.
The true common failure on the type 4 engine is a dropped valve seat. That is the problem that usually causes the tear down. For this reason I don't recommend anybody rebuild a type 4 head themselves OR have a local shop do it. Instead it pays to order the head from a major rebuilder like GEX. There are several other pro type 4 builders that are trust worthy, but if you are planning on not tearing into the engine again any time soon, please make sure the heads are done by someone with real
experience (100 heads or more preferably). Years ago Mark Stephens engineering, Strictly Foreign, and FAT along with MOFOCO and GEX were the best sources (mostly CA businesses). MS even had a 100K no dropped seats guarantee, but they disbanded and I'm unsure what name that group of type 4 pro's are working at now. Long story short don't skimp on the heads especially the slightly weaker (even though best flowing) 3 stud 2.0 head. Big valves and flow work on the 4 stud 2.0 head proved to be strong and made a lot of power for me, so Big valves are a definite recommend.
If you do have a local shop rebuild it make sure they don't jack it up by supporting the engine by the sump plate. This and over tightening the bolt can weaken it later causing the boss to break and leave the oil pickup tube high and dry. Speaking of, have them use a new (or rebuilt) oil cooler when putting it back together. Too many people spend thousands of $ on a rebuild and use an old half clogged, about to leak, bent up like an accordion oil cooler. And while we are speaking of that. Some mechanics don't put back all the cooling tin because they think the engine will run better without it. More often than not the thermostat is missing, not connected or defective and a few pieces of tin are left out in the hopes that air will "flow better" geez.
The little details:
While engine is out and all apart everything must be cleaned. Its time to get the sludge and grease accumulated from slow leaks out. This is very important to a clean, cool running, and non smelling engine. Repaint the tin while your at it.
Make sure they put back the tube retaining wire in the heads and seat the push rod tubes properly, and not to put a bunch of goop on the seals. The reason they leak at times is because the holes were never cleaned and new seals not rotated on a clean de burred surface, centered and supported by said wire (proper sealant is good on these, but not a tube of permatex they will leak more than ever then!!!).
Anti seize on all exhaust studs is a must.
Ground plane tab on case stud (top of case) is great if they don't forget to put it in. I hate to disturb the case after it has been sealed/bolted together.
As for over all costs, a good bit of it could be saved by doing more of the work yourself, but I understand most people don't have the time or the energy.
Make sure the mechanic that touches your car is trustworthy, and knowledgeable about the type 4
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