i love them VW's, id deff bomb it, and yes them heaters are the best thing since sliced bread

 

If it doesn't have a turbo yet, that's the first thing i would do. My son converted an 86' VW NA diesel I had been using as a generator power plant. I think he put a K3 turbo on it. You will also need the aneroid for the top side of the injection pump to get your boost indued fuel running. If you're not familiar with those thee is a great Bosch Injection book on the VE pumps that is worth buying.
Oh yes and go to the larger injector tips and advance the pump timing. I can't remember what the '85 engines put out but you should be able to get it up over 115-120 H.P.. You will start burning out standard clutches at that setting so that will need to be upgraded to the VR6 clutch I think. I put a low mass VR6 flywheel in my 2001 Tdi engine that is turned up to 130 h.p. with .205 mm nozzles and an ECU remap.