35-38 isnt too bad. what kind of roads are you commuting on tho? as that has a huge effect on mpg

the missus has managed 41.4mpg in her 1.8 20v petrol passat, but that was mainly motorway miles

its gonna be a ball ache wiring up the ohc KA engine thats labelled as the duratec tho, as they all have built in PATS i believe

get a 1.4 cvh and build that up with RST manifolds and turbo