Strict emissions kills the whole deal.
Beat me to it.
The FIRST thing you need to do is to find out what is legal in your area. California, for example, automatically fails any vehicle with a "tuned" computer.
I'm fairly sure that if you swap in a newer engine, you have to swap-in ALL the emissions-control devices that engine would have been equipped with in it's donor vehicle.
Point is, you need to talk to the emissions police to find out what you can get away with, before you spend one dollar on modifications.
Spending money to repair problems and get back "lost" horsepower due to wear or failure of parts is another story.
As always, I'd be doing a TOTAL inspection and repair as needed, of the steering, suspension, and brakes before doing anything to the engine or the rest of the driveline.