Ok all that and you want it on the cheap...

Well for starters, that 2.5L is a 2/3 4.0L, but with a higher compression ratio from the factory (9.2:1 vs. 8.8:1), but the bore and stroke are the same, in fact, the pistons, rods and most internals are the same also, which essentially means you can find SOME performance tricks that will work on a 4.0L can be used on the 2.5L...

Now for the good part:
(I have a strange fascination w/ performance upgrades to odd engines)

Straight from the Mopar Performance catalog:

Mopar Performance upgrades for the 2.5:

2.5L Jeep Inline 4 Engine

Stage I Engine Package A

* Set timing for Maximum HP
* HP Hydraulic Cam 240" or 248" P4529656-657
* Valve Seal Package P4529661
* Valve Spring - Conical P4529217
* Conical Retainer- P4529217
* Low Restriction Exhaust
* Estimated 10 to 20 hp gain over stock

Stage II Engine Package B

Same as Engine Package A except for the following items:

* HP Hydraulic Cam 256" or 260" P4529658-659
* Centerline Cam with Bushing Kit P3690936
* Backcut Valves P4529212-213
* Richen Carb
* Engine oil Cooler P45292690
* Headers
* Estimate 20 to 30 hp gain over Stage I

Stage III Engine Package C

Same as Engine Package A and B except for the following items:

* Increase C.R.
* HP Hydraulic Cam 268" P4529660
* Ported Head P4529644
* Intake Manifold Attaching Package P4529679
* Good Gas
* HD Rod Bolt and Nut Package P4529817
* Estimated 20 to 30 hp gain over Stage II


I also found these for ya:
Jeep 2.5L Power
4.0L throttle body swap on 2.5L Don't forget about a throttle body spacer as well..
2.5L Performance Tips
Jeep 2.5L Performance Mods
http://www.jeepforum.com/forum/showthread.php?p=212628
That should keep ya busy for a little bit, as I know I've built a few 4cyls for goofing off and for competition. I never done up a Jeep 2.5L, so this intrigues me to all hell..

 

While I bought the ZJ a couple years ago for decent money, the 90 XJ was a beater for $700. It was rough looking, but it ran OK. For a while... Another story for another day...

Cheap can be done if you are patient and watchful. As I mentioned, I got a 87 for free, missing some stuff but great tires and wheels and a remanufactured motor. I used a lot of parts from the parts XJ for the 90, and some will go for another project, and the shell to a friend.

On my ZJ, I'm running some used 31s ($100 and will be fine for a year or more), wheels that are older but freshly powder coated ($100 for FIVE matching wheels), Teraflex front upper adjustable control arms (free, I bought new bushings), Tuff Country fixed lower arms (free, again bought new bushings), 3 pairs of 2" coil spacers (free, used two pair for the ZJ, the 3rd will be going in the XJ with some lift blocks from a different project). I had to buy a replacement header panel and grill, but locally a couple guys part things out so I got that cheap. And a friend sprayed some John Deere Yellow tractor paint on the XJ to make it purty (that week we painted two vehicles in my garage for less than $100 in paint and supplies, and, uh, beverages...).

One can be cheap, and still do things nicely... But I do spend money on new parts when I need to (axle Ujoints, unit bearing, radiator and so on...).

ZJ with the free lift parts in it...


XJ and Ranger, both painted in my garage...

 

$80 for a short block is pretty hard to beat....

For simplicity sake and just a general family fun mobile, I would swap a good lower end in and call it a day.

In 84 and some of 85, the 4-cyl motor got a carburator and it was no power-throwing monster. So one of the upgrades you might want to consider if you have the carb is to take the intake, throttle body, ECM and its assorted parts off of an Renix era(87-90) model and get fuel injection for it. It would be a power boost and give you better reliability when in off-camber situations.

If you are interested in a 6-cyl.. Jeep used the GM 2.8l for its early 6-cyl power. Now GM sold Jeep the very early weaker casting block. So look for something from a little later S-series pick-up/blazer. Around an 87 will give you a fairly good motor with fuel injection. These motors were also in the Camaro/Firebird of the same era. You just need to make sure that the donor is rear wheel drive as the front wheel drive version has some of the external engine parts that will not work with your engine bay.

Another VERY popular swap is to put a 4.3l GM into the Jeep.. It was designed for the next gen of S-series after after the 2.8l and works like a charm in the Jeep. There is TON of information out there about this swap and googling it will yield a trove of information.

There are quite a few more unique swaps out there, your problem is far from rare. JeepMJCo on this site did a GM 3800 swap into a Comanche, and it was one of the really cooler things I had seen done in quite awhile. Pat is a good guy and will answer any questions you had about the process.


I almost forgot one more piece of good news. With a 4-cyl and a manual tranny, there is a VERY good chance you have 4.10 gearing your axles. If you add some larger tires and some power, you will be HAPPY that you have them.