But the 1.8T is an awful track engine, in my view.
1.8T is a very viable and very easy option with the M1/Mk2/Mk3 series, and it would easily be within the price for mods quoted above, you can pick up a low mileage 1.8T for 1.5K with box. Loom work, and the suspension, ARBs etc would still be below another 1.5K.
Yup...and more fun on the track.
So in essense, sticking with the VAG cars, you could build a Mk2 VERY cheaply that would absolutely destroy 99% of Mk3 Golfs, Mk4 Golfs, Audi A3s and Audi S3s.