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First I went to a local VW mechanic in WA looking for a type IV core and boy did I receive a tongue lashing for even the consideration of using a type IV. I saw a couple in the shop, but in the end he never answered my question and I didn't press the issue. Sorry, but my first big face to face with all of the negative stigma surrounding the type IV.

Anyway, my question is reguarding the use of a 78mm crank with 96mm pistons. How does this affect the efficiency/reliability of the engine compared to a straight up 2.0L with 71mm and 94mm?

no change in engine life, or in MPG by having a big engine.

I routinely recommend a 78 crank and 96mm pistons. It's an easy engine to build, and gives a lot of power. I use type 1 rods (cheaper and lighter), along with special pistons (type 1 wrist pin) to complete the package. Works VERY well.

Just remember, the ultimate factor in how good your engine is isn't type 1 or type 4, it's the details on how YOU do it.