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Rick,
Hood catch - there's a huge amount you can do just with adjustment to help, and also you can take the part out and check to see if the back plate is bent (mine was). Bend it back and that helps a ton also - it take a lot of the play out of the latch movement.
Engine - lots you can do before you spend money rebuilding. If you have good compression and leakdown (worth the $75-100 to have a good mechanic do the test for you), I'd spend your time looking at getting carbs rebuilts (gaskets, etc you can do pretty easily, more is better to send out) and adjusted well, and look at the easy stuff first - good coil, distributor (RSR0012 from Classic and Speed Parts, if you can get one, is worth it's weight in gold), good plugs and wires do a lot to get the most performance out of what's there. After that, maybe a Bursch exhaust to get a few more HP (and a great sound). That's all stuff you can do with not too much money and/or time if you've got a mechanical inclination. (You probably wouldn't have bought a 912 if you don't though...). Then see how you like it. From there, it's a bunch of money for a rebuild, put in a 911 engine (but you could have gotten one of those for about the same money), or if you want another interesting way to go, look at putting in a Type IV engine similar to what's in the '76 912E. There are a lot of nice conversions out there.
Seriously though, a well-put together fairly-stock 912 engine is a whole lot nicer to drive than an engine swap that's done poorly, so starting with evaluating what you have is the best thing to do.
Good luck, and post more info if you'd like more feedback!
Jason
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