Having modern good working AC has little to do with the type of engine in the car. The AC system is a stand alone system that has to have matched components to work properly. The engine only drives the compressor. If you want to stay Porsche power I would go with a 3.0 or 3.2 911 air cooled motor. I built a GT clone with a 3.0 the car was fun

. If you want to stray outside of Porsche power and want water cooled I'd go four cylinder Subaru there are plenty of conversions out there. Decent power good reliability and low center of gravity. And as stated earlier a Jake Raby built four might be the ultimate sleeper he builds great stuff.