I say build this engine, spend a shitload, make a bunch of horsepower that still wont beat your mums falcon. Enjoy every moment when you fire up this thing and it's lumpy, so lumpy, on idle it froths up your beer and scares grannies when you drive past 'em and they drop their shopping.
Most race corolla's are running the 4K because of the class restriction, not because they're better than a 5K.
Sensible point doogs, puttin 80+mm pistons into a 4K just turns it into a 5k of sorts
I suggest you just build the motor on a slant. I built mine with the dellorto's for about 2000, tuned. A very rare upright kit just sold on here for 1000 bucks! You wont see huge gains from uprighting and there's and you can always upgrade the motor later on. The biggest gain is found in space in the engine bay, it's difficult getting air cleaners to fit on sidedraft carbies in a Ke1x engine bay. Look at my pics.
Good attitude, build what you want, spend what you can, forget the "do the body first" "do the brakes" bullshit. You asked about building a race motor, not "what should I do to my car first". You can do brakes and suspension while you wait for your engine to come back from the machinist.
My car handles like shit, but it screams. And now I fixed the oil leak, I love it again.
Don't bother with things like forged rods, 400 bucks you can spend elsewher. If you're really serious though you could regrind the crank to stroke it. Nobody ever talks about K engine cranks breaking.
Spend the money on balancing it so it revs. Get a dirty great big cam, dial up the compression, spend 500 bucks on getting the head to breathe better, slap on twin sidedrafts rip skids, axle tramp, make noise, upset neighbours, freak out some squares!