One of my piston rings took a crap and the car smokes like a crop duster.

Seeing as how I burn probably between $2500-$3000 gas per year of use of the motor, I am willing to spend between 4-6k on it since Ill probably get years of use out of a fresh rebuild and can swap it over to my next duece.

Granted my car is nothing to gawk at on the exterior and an expensive motor would be more worthy of a better condition chassis, but I like speed and responsive acceleration, plus I need to pull off my URV8SX license plate (I got smoked by a local with a  yellow c6 zo6 2x on the highway)

I am looking at going with a 3sgte engine with a 2.2 5sfe crank, 9:1 CP 86.5mm Pistons, ACL race bearings, HKS 264/264 cams/cam gears, fidanza flywheel, ACT 6puck unsprung clutch, and engle valve springs. Im debating on whether I need to spend the extra $500 or so and get the OS valves too, but I dont want to put myself in too much debt.

What do you guys think? My car will truly be a beast after this kind of motor upgrade, itll probably get better gasmileage with the lighter drivetrain components and much better throttle response (50 trims are laggy!) I think it might be so fast Ill require a cage just to drive it at the track, and it will probably be a 10 second car after I spend another $1500 in mods on a standalone PowerFC and 800cc injectors into my stock fuel rail.

I already got a lot of the supporting mods I need for this kind of power, people have made 424whp with the side mount IC i got and ran mid 10's on my setup so the potential is there.  

I'd go with Cosworth cams over HKS.  HKS outsources their labor to China now unfortunately so their quality is declining at a rapid rate.  You might as well upgrade the valves since you are going to be gaining quite a bit of power.  The faster revs could potentially bend a valve.  Especially if you mis-shift skyrocketing your revs.  With a proper tune, and good driving, you should be running 10's with no problem.  The only problem with MR2's and MRWD cars in general is the cooling issue.  Those SMIC's just don't work as good as FMIC's.  You should look into a water spray kit for your SMIC.  Sounds like it'll be a wonderful build though.  

The advantages of the 2.2 stroker is I can make more power with less boost due to less drivetrain weight and quicker rev's, better internals for higher hp.

Granted the SMIC is inadequate, people still have ran 10's, I assume on a cool day, using a built 3sgte longblock and basic bolt ons+SMIC, here is video proof of another member using my future engine setup and a 2step revlimiter I dont have yet, running a solid 10.66@130mph
http://www.youtube.com/watch?v=WH_hxuKsLNs&feature=related

I dont expect the exact same results as this guy, but solid 10's@130mph is pretty good for a basic bolt ons built longblock and the SMIC wouldnt be as stressed out with my with better engine components so I can make more hp with less boost so it wouldnt suffer as much from heatsoak.