Replacing engine in a 2003 S on a $15K budget, what's a high performance strategy?
 

My girlfriend is a mini fan, is on her 3rd mini S, and instead of moving to a new one in a few years she is considering putting together something more unique in the form of a well modded 2003 mini S.

The car we are looking into to start with is a 2003 S coupe that is otherwise clean, has some nice odds and ends put into it already, but has 150K and needs top end work. Haven't looked into what is wrong exactly but am not interested in a standard repair if we go this route, rather either would like to see a crate engine (or modded crate engine) put in there or the engine be rebuilt and modded in the process. No sense trying to use an old tired bottom end and building on top of it is what I think. The point is not a old stock car, it's building something cool compared to just another new one.

So without knowing a damn thing about mini's really (know lots about engines and cars, not much about mini's) I'm looking for suggestions on where to start - what can be done and what sort of HP can you get out of one of these 1.6L blocks if you are willing to go the whole route? I think for it to be justified I'd like to see the stock HP brought up into the mid-200 HP range at least, ie say 250 HP from the stock 160 or so... Or also even, if a 2003 and/or 1.6L isn't a good starting point and we should seek a different year model & why, that'd be great feedback too.

What do people do to these things to get there? If you had an idea on budget I'd like to hear that too. At the moment we are thinking keep it under $15,000 including the crate engine or rebuild and labor. And please I don't want to hear nitrous - sure it may go that way later, but I want to see that 250 HP without it.

Thanks in advance!

Jon