If it was me I'd keep the old IM & make it my own. But I like that sort of work & also have no money.
Curious about a couple claims and aims expressed above:
2. The IM doesn't feel like it would take much more power without serious mods.
6. My aim is a Speedster with approx. 120 BHP that will cruise safely at 75mph.
So, re #2, what feels wrong about the IM? There are several pan-based VWs running around with a lot more than 120 hp and the "serious mods" required usually amount to front disks, bigger front sway bar/bolt-on rear camber compensator (for swingers), shocks, new ball joints or king pins and new tie rod ends. That and, in some cars, set the front beam spring rate correct by taking a few leaves out.
These mods are easy to do at home and should result in a car that handles pretty good.
As for #6: You are going to be building an engine anyway. Stroud has shown the way to a cheap and reliable 140 horses and I'm struggling with the same basic concept in my TD. If I had a Porsche replica my first choice would be air-cooled, and it's apparent that CB Performance makes a righteous street Type 1 for healthy--but not insane--money. BUT--and this is crucial--if your aim is a car that cruises "safely at 75 mph" you need maybe 80 horses, not 120. My TD with all of 50 (really maybe 42) horsepower cruised at 70 all day, for several days. Cruising on the highway really doesn't require power. What requires power is drag racing, hill climbing, burnout competitions, drifting, etc. If you're not planning on doing any of those things, then your power "needs" are probably less than you imagine.