I always liked the ring of the name GNX-7 for this car. It seemed to suit it perfectly.
I truly loved my GN powered 2nd gen when I built mine. The 3rd gen has much more confined engine bay like Mike said. Your setup with a healthy turbo/injectors and proper gear ratio will be silly fast.
If you want to stay with the IRS setup there is a rotary powered 2nd gen running an Explorer IRS diff with custom cradle (from a guy on v8rx7forum.com) and recently went 8's. Not sure how legal it is at strict tracks though. Solid 8.8" would certainly be stronger.... but you would lose the handling aspect quite a bit.