Adding to what Ian has already covered
Decent mileage motors will run you from 3.5-6K for everything. I cannot emphasize this enough: get a motor from a RUNNING car. My motor had been sitting for a couple of years, needless to say it needed a near-full rebuild.
S14s are not for those worried about spending some decent money. Like all M motors they require a high level of preventive maintenence or they will reward you with endless problems. Even on a low mileage motor, plan on spending 2-3K, replacing all wear items (all pumps, gaskets, bearings and timing assembly).
You can get a motor from a '87 car, just be sure to update the valve springs.
Im going with the 265 tranny. I dont think the cutting will be that hard. Although I am still not clear on which driveshaft to use.
I think with big rubber, coilovers and big brakes, it'll definitely be worth it.