The proprietor of the other shop in town had a 240Z with a 400CI Pontiac smallblock in it... He had it making something over 400hp, in a 2800lb car!
Anyways, what level of work are you willing to do on this car? If you're willing to go swapping motors at will, a 240Z or a first generation RX7 is just the ticket. If you've followed this forum much, you'll be well aquainted with my love for the RX7/Ford V8 swap. Realistically, all costs told, that would cost around $3000 if you did everything yourself, accounting for engine, transmition, car, kit, and exhaust.
http://www.automotiveforums.com/vbulletin/t64088.html
I'm not sure about Zs, I have seen a kit for smallblock chevies for
$1500, but that is way too much, and probably has $200 worth of parts, and $1300 worth of mark up.
http://members.tripod.com/~grannys/nissan.html
http://www.zhome.com/rnt/L28conversion/engine.html
http://www.geocities.com/MotorCity/D...car/zpage.html
Some 240Z pics for ya
http://www.nissannews.com/multimedia...olour/240Z.jpg