We are planing similar things. I have a '73 mk1 127 fully restored and '75 mk 1 127 im building for stage rallying. I bought a fiat uno race car which was raced over here in Ireland in the Uno championship for small money and im using this engine and box for the rally car. its the 1.3 128/ritmo engine and has 96bhp. The engine was blueprinted and raced completely standard- no fancy cams,carbs ,manifolds etc. i have picked up a few nice bits second hand for small money to go on to it( big valve cylinder head-300euro, high lift cam-100euro,twin 45 webers-200 euro, 4-2-1 exhaust manifold-280 euro) im hoping that these will give me an extra 25-30 bhp. a lot from a small light engine that will not effect the excellent handling that the light 127's naturaly have.That will easily get you to 100km/ph in 6 seconds or less! and this engine will easily fit into the 127 engine bay without any butchering.
Food for thought?