What to do with a broken Audi

[DON PORTO <96sp062@dvc.edu>]

I have an 82 Audi 4000 1.7L with automatic trans.  Last week the engine 
started making some serious death noises, metal on metal sounds (the cars 
has 187K original engine and tranny, nothing rebuilt)  the mechanic said 
if I want to spend the money he would pull the engine apart and do a 
rebuild.  But I am not interested in spending up to a thousand dollars or 
more on a car that is worth a few hundred.  My question is would it be 
fairly simple to get a 1.8L from any VW or Audi and put it in place of my 
worn 1.7L.  Will my automatic bolt right up to a 1.8.  Also what is the 
largest 4cyl I could put in that is still 8v, (I think it's the 1.8).  
Should I just dump the car and buy a newer Audi.  I don't really want to 
spend allot of money, and I know I can do the engine swap myself, I just 
don't know if I have the time right now.  I'm pretty sure I can find a 
cheap donor car, (GTI, Scirocco, ect...).  I also wouldn't mind if I 
could get some extra HP out of the deal.  The 82 1.7L only has about 
74HP.  Another point is that the car needs new tires at all corners.  But 
the body and interior are in good shape, as are the alloy rims.  Any 
advice would be apreciated especially from members with VW-AUDI engine swap 
experience, any tricks or things to watch out for. Thanks.

DON PORTO, lost forever into the depths of the unknown, at DVC.