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Almost went there with the first Pink MG. Many Speedster replicas are going this route. It sure makes the most sense too. Start with something that started out at 2.0L, not 1.2L.
I found most Type I motors run too hot and are not reliable when they are made bigger than 1776cc unless they are converter to the Porsche type cooling fan and shrouding and run deep sump, full flow oil systems. All of this ain’t cheap, so the Type IV made good sense.
The two things that stopped me…Jake Rabbe was the only supplier of decent rebuilt motors and his stuff was way too costly and way too long a wait to get one. The other, the engine cover and rear “frame” would have to be modified to make it fit.
These motors are not easy to find…good or trashed. But if you do it, post all about it here please.