Stock rods are fine as long as you don't want rpm's higher than 8k. David Lashbrook made over 750rwhp with a 100 direct shot of nitrous on stock shot peened rods. A good set of forged pistons and rings (cp, mahle) is all you really need for a good bottom end capable of a reliable 500rwhp. I recommend the following for a good reliable budget engine rebuild capable of 500+rwhp.
1) pistons/pins/rings - CP
2) stock shot peened rods (possibly polished) - Toyota
3) New Oil pump - OEM
4) New bearings - Clevitte77, TRD, OEM
5) Engine Gasket set - OEM
6) MLS Head gasket - Cometic or HKS
7) Engine Bolts/Studs - ALL ARP
8) Camshafts - HKS
9) Good head work
10) Possible Sleeved Block (resists cracking)
This is just a long-block build for somebody on a major budget. Of course there is sooo much more you would have to do to make it complete. Such as EMS, Intake (stock extrude honed or custom), Exhaust manifold, turbo, WG, etc..... Tuning is absolutely the biggest part of making successful power. I say keep it cheap, if the bottom end is all still good (minus pistons), buy a gasket set, MLS head gasket, Pistons/rings, put it together and you have a strong bottom end. This should be capable of holding a reliable 350rwhp plus a small (50 shot) of Nitrous. That will make for over 400rwhp after nitrous. THATS FAST in a Mr2!!!
I know I left out details here and there, but it's late and I just wanted to share by brief opinion on what I feel he should do. Shooting for over 400rwhp on boost alone will cost a fortune. Add it all up, add 2000 for BS and stuff, plus dyno tuning! These things can be expensive if you get carried away. Stick with a moderate build and with what is proven.
:2cents: IMO
Brian