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Find a eta 2.7 and put a 2.5 head on and you'll be set for a turbo! The eta motors are lower compression but the 2.5 head will allow you to rev to 7000 safely with stock rockers (can rev higher with with aftermarket rockers from Ireland engineering) and can push 12 psi on stock head studs but might as well do aftermarket studs while doing the head. I know m20's make around 275whp in e30's at 7(ish) psi, an e21 would fly with that kind of power!! And you could do the motor/ turbo for around 4 grand said and done
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