Late to the party here. I used to have a 67. The Rover / Olds / Buick 215 is the way to go if you want to stay close to what was available originally.
http://en.wikipedia.org/wiki/Rover_V8_engine
I think the power is probably reasonable, compared to hotter engines.
The s2000 drivetrain sounds fun too. I have a buddy who has it in a 1970 Celica and it really screams in a light car.
G