Cheap Buggy - Engine Suggestions?

Short version: I now co-own a dune buggy. The Ford 2.3L Lima engine doesn’t run, VW transaxle scares me, and we’re considering re-powering this thing. Looking for suggestions for FWD engine/transmission donors with the shortest possible distance from front of engine/header to the axle centerline…..or better yet a FWD engine which sits behind its transmission, if that exists. Distance from backside of seats to axle centerline is about 16” or so.
 
Long version: Four autocross friends happened across a very old dune buggy. Heavy wall steel tubing, VW torsion suspension front and rear, 35” mud tires rear/tractor tires front. It has a Mustang 2.3L 4-cylinder, 1969-ish Volkswagen bus transaxle, and they’re mated via a custom billet aluminum adapter with unknown clutch shenanigans. I know nothing about these transaxles, but I’m worried they’re fragile for the amount of abuse we’ll undoubtedly be giving this buggy. It came with a spare identical trans sitting on the seat, so not sure if that means the one installed is shot or what... The buggy sat under a tree for a few decades (without an oil cap). All four cylinders had some water in them, and surprisingly only about 3-seconds of water streaming from the sump when I drained it, followed by plenty of oil which looked fine (no glitter).

The engine SHOULD run, but refuses. We did an oil/filter change, put in a new starter, new battery, new coil, checked spark at the plugs (good), it definitely has compression, timing seems right by careful inspection but haven’t used a timing light yet, spraying starter fluid through the carb….it puffs the starting fluid smells right out the exhaust but will not start. My best guess is that it’s just turning over too slowly or there’s something electrical we’re missing.
 
Sooo…. We pulled the head off. Cylinder one is scored from what looks like a stuck ring. Other three cylinders look serviceable, but would need a good hone. Before we put any more money into this setup, we’re considering re-powering with a complete FWD engine/trans from something like a Fiesta, Aveo, Sentra, whatever will fit and is easy enough to run on its own ECU in a dune buggy application. Have welder, will fab as needed. Plenty of junkyards in our Huntsville Alabama area.
 
The critical thing is finding a FWD engine that is really short on the front end, meaning from front of engine/header to axle centerline. Might be able to lean the engine back slightly too. Or, are there any FWD cars with the engine BEHIND the axle centerline? Roughly 16" from back of seats to axle centerline, and 36" lateral room inside chassis between wheels. Plenty of vertical space and room behind all the way back to the rear-mounted radiator. We just wanna have fun with this thing!
 

sounds to me like there isn't any spark... have you pulled a plug wire and watched to see if it sparks to the valve cover?

But to answer your question, I'd be looking at a honda d series if it were me. 

I'd fix the engine, or get another one like it.  I don't see any reason to be scared of the transaxle, and swapping everything over to something new would take a lot more money and effort - if you were going to do that, you may as well start over from scratch.

I think there are some VW engines that will bolt to that transaxle.

But I'm with Stuart. Fixing it seems much easier.

Just guessing here on the dimensions, but...Saab 900?

https://grassrootsmotorsports.com/forum/grm/saab-story/133419/page1/

You already have the adapter and  they use a modified  VW flywheel machined to the Ford bolt pattern and a regular VW clutch , 

If you post a photo of the transmission throw out bearing we can tell you which clutch  you need if you want to replace , 

Then just  find another Ford motor , maybe with a turbo

You could have it running in a weekend !

I have tried embedding photos into the OP multiple times now, to no avail. I have cropped and resized, they're barely 350kb in size. Maybe I'm too new, and don't have photo posting privileges yet? Any tips appreciated.

@Robbie - We have tested spark by holding a plug against the block. Confirmed spark present at all cylinders/plugs. Honestly I've never seen ether NOT go boom, even if given a weak spark, as long as there's also oxygen present. I'm usually a domestic guy, but google says the D series came in everything from 1986-2006. I like the Honda idea.

@Stuart - I don't know anything about this transaxle. Or why there was a spare sitting on the seat when we got it. I can't even identify if it's an automatic or manual, the lever seems to only move forward/backward and not side to side, but it's stiff with rust so who knows. I'm just nervous that when we get to doing burnouts and jumps (wheelspeed WAY up when airborne then sudden dramatic slowdown when landing), the transaxles insides will end up on the outsides. I guess we can always just run it until it breaks? 

@Woody - I love Saab. Probably won't find a donor at our local LKQ though. 

@Californiamilleghia - I have some photos to post, but hitting a roadblock. No pics of the clutch yet either until I pull the engine out, which at this rate wont be long.

a VW bus trans with CV joints has a bell housing that is bolted on , its the only VW trans like that , 

that is the trans most of the off road racers used , its pretty beefy inside

subaru flat 4 has a big following and tras adaptors are available, It's the lightest/most powerful option this side of a Bike engine

In reply to californiamilleghia :

Yes, when I raced we used those transaxles. We changed gear ratios but they were pretty stout. We also changed the cv joints to 930 joints as they were stronger. Worth the money for sure

I'd just find another 2.3, they are cheap and plentiful. I sold one out of a 88 Mustang with 39k on it with all wiring and ecu for only $300 last year. 

I agree with the "check for spark" advise from Robbie. Probably better, and cheaper, to spend some more time on the eng. you have rather than jump into another engine just yet. Also make sure that you're running fresh gas and that it's up to acceptable pressure.

Those transaxles are sturdy and simple to repair. Even if it is an old one with integrated bell housing they are easy. Plus you have a spare. Take it apart and learn about it. The only FWD cars with the transaxle in front of the engine are a few old Renaults and Citroens, neither of which are strong or easy to source/repair. Lots of engines have been adapted to the VW trans over the years, so if you really can't stand the Ford there are lots of options without re-engineering the entire buggy.

That trans should be a 002(also called 3-rib). Much more stout that a Type 1 transaxle and better gearing for your 35" tires. Plus, it's a pretty light vehicle.