Is the Lancia Beta lump worth any effort

[The Slug]

maybe showing my ignorance here, but wouldn't a lighter engine improve the weight distribution which in turn should improve handling characteristics? Lighter springs/damper settings calculated for the lighter engine would help with any skitishness?

If a heavier engine helped to settle the car, he had his suspension set up incorrectly. I know that tire pressure, bound and rebound as well as springs could all cause the car to feel skittish with a light rear end. I have driven heavy tailed cars, and they can feel quite planted (my 1976 Turbo Carerra was one) when properly sorted, but there is a penalty when they step out.

Me, I just take advice from the guys that have the car's, have competed in them for years successfully, covered several thousand miles and appear to know what they are talking about from experience.
I find its something you can't pick up from a book, experience.

Good luck with your engine choice and suspension setup, it will be interesting to see which way go, and how far from what others have done you end up with.