My recollections on the matter, as a VW newbie:
I went through this exact throught process about 18 months ago, having originally wanted a 2L bus, but I learned that fitting a 2l (i.e Type 4) engine apparently requires a fair amount of cutting of the engine bay. The more I looked at the bus, the more original I realised it was, so it seemed like sacrilege in this case.
So that left me at Type 2 engines, and a consensus held amongst some is that 1776 is a sensible trade off between cost, reliability and engine size, if you are sicking to Type 2 engines. I realise bigger is possible but the advice I received is that 1776 is a sensible upper limit all considered for most people.
I later learned through investigation that my bus had its original engine and tinware etc, so I opted to keep all this for nostalgia's sake - basically meant I was down to 1641cc but with twin carbs and a moderate Engle 90 cam.
It pulls absolutely fine on the road, but I haven't done any motorway stuff with it yet.... Having a good tune up means it is going great guns and bhp decent figures (which I forget as I don't find them particularly interesting - but it goes like a train!!)
This probably hasn't helped... :lol:
R