The 1.8 and the 1.6 are completely different engines bar the name, the 1.8 is actually an American engine and based on the 1.9 "Tall block" If you wanted to keep it I should think a set of carbs may help things, as standard it has a Pierburg carb, later models were CFI.

The second option is quite common as well and known as a ZVH, however I am not sure whats involved in doing so alot of them are usually 1.9.

Martin