OK, I am going to try to make a long story into a short one. My sister bought an early-mid '80s VW Golf. Its a POS. I havent seen it yet other than a picture because she lives ~5 hours away. I cant get too many details right now because I dont have anyone over there with any mechanical know-how. From what I can gather it needs a starter and the engine is currently hanging in the compartment (isnt bolted to the frame). I'm gonna pick it up at Thanksgiving and begin piecing it back together. I'm thinking of just scrapping the current setup and trying a all mechanical turbo diesel swap but have no clue what kind of engine to look for. Is there an option that might fit well with the current tranny? A little nudge in the right direction please.

 

Mk2 Golf's came stock in Europe with 1.6 liter turbo and aspirated diesels.
From what I can gather, all VW 4 cylinder engines have the same tranny bolt pattern so you could swap a mechanical TDI from an Mk3 Golf. Either way, simplest option is a VW engine.

 

get a mechanical TDI engine from a MkIII !

Most power.. with mechanical..