If you gave me those $10,000 and a stock mk3:
#1 is excellent machine work done by someone who KNOWS the little details for machining a 7M, get a full-flow-thermostatic controlled oil cooler (personally I would also have a custom oil pan done up with a new pump or at the very least Mic and spec all the clearances in the current pump, then shim it about 5mm), double check all your machinests' measurements then get yourself some good rod/main bearings, new oil pump drive shaft bearings, and a good rod/piston combo (just search these, you could spend hours deciding on what brands to go with). If you want to play with headwork and get into bigger cams at this time go for it, but personally if my cams were in good shape, id get a 3-angle valve job, some minor porting on the intake side and spend my money elsewhere.
Assembly is most important, take your time, make sure you know all your clearances both on the shortblock and the head. Get a good MHG (HKS stopper) that gives you the desired compression ratio. Go with ARP hardware and torque everything slowely, carefully, in the right order per TSRM, according to the FASTENER torque spec reccomendations. Then pick a parts list that suits your goals (see the 7M HP link below for ideas). As previously mentioned, the power is only as good as you can get it to the wheels, and will only do you good if you don't kill yourself using it. Spend the money on good clutch/brakes/suspension/tires/etc. You can run the stock R154 until it goes, but I would suggest just rebuilding it while its out and be done with it. I learned that the hard way! Then there are always those little things that might not serve as necessity performance upgrades, but you are going to want (like a front facing intake manifold, possibly better coils and ignition, etc.) Don't forget to save money for the unexpected gremlins, and cosmetic things you might want later. Also remember no matter what set up you go with that it's ALL IN THE TUNE! Invest in a good tuning tool and an even better tuner.
http://www.supramania.com/forums/showthread.php?66742-***SM-Member-Horsepower-List***
We could all swap in 2J's and drink the koolaid, or keep alive the 7M and show some originality!
