You should do a leakdown test. That'll let you know quite a bit. Rebuilding bottom end on these cars is pricey. A valve job won't be nearly as bad.
You can spend as much as you want to throw at it. If you want to make more FI power, lower compression will allow you to run more boost. Of course, it's not as cheap as dropping low compression pistons into a KA24DE out of a 240sx. The market just isn't there. Stock block is probably good to If you find that your rings are toast, you might consider just finding a low mileage M54 to drop in. Technique claims 430 crank hp from their stage 2 with only a new head gasket and upgraded studs. If you're wanting more than that, you should probably head over to a more specialized forum... They can lead you in the right direction.
Last edited by aggieE46; 02-08-2012 at 02:08 PM.