I would rebuild the motor to stock EFI turbo specs. Factory parts or good after market stuff (Michigan 77 bearings, high end turbo head gasket, ARP rod and main bolts)
Whether you need to hone or not depends on piston to cylinder wall clearance. Again on tolerances buy a manual and go with teh factory specs. The factory turbo motors are very durable so i would stay with that setup, hard to improve on perfection.
Along with your water/methanol injection I would install a cool can. A cool can is about size of a medium coffee can with a fuel line entering and coiled around inside. The point of a cool can is to refrigerate the fuel. Spraying cold fuel into the intake will have the same effect as water/methanol by removing heat from the intake air as the fuel/water/methanol goes through the phase change from liquid to a gas. In fact there has been some complaints that the water/methanol erodes the intake impeller blade so I would try the cool can first.
Also the stock carb was a Holley Weber 5200. The carb does not need special modifications to work on a draw through but in a old magazine artice I had they upped the primay jets by one size and I think they bumped the secondaries by either 2 or 3 sizes.
Your probably going to have to have a custom mandrel bent crossunder tube, then I highly recommend taking it and having it Jet hot coated tfor thermal retention. By keeping the heat in the pipe you keep the exhaust pressure up which helps the turbo spool faster.
And a high flow exhaust is a must with a turbo. 3" would be best but 2.5" is still good.(Price jump between 2.5" and 3" is significant to me). Larger exhaust helps turbo flow better and reduces back pressure and will also help turbo spool up faster.
Cold air induction will help also. The factory setup is functional at best. I was going to adapt a EFI CAI setup and use a carb bonnnet and run a homemade tube between the two.
The carb turbo 2.3L responds to the same mods as a EFI turbo 2.3L. It likes ported heads and turbo cams as much as anyone else. If you have a stock slider cam in the head pull it and install a Ranger roller and set it at 4 degrees retarded. If you have the money you might see about getting the exhaust manifold ported. Tubular headers dont like turbos and have a tendancy to leak.
The M80 and M81 Maclaren Mustangs used a 2.25" high flow single exhaust and cranked the boost from 7lbs up to 11lbs. The MacLarens were rated at 175hp at teh crank. The 84 Mustang SVO was rated at 175hp. With the bigger exhaust and cool can or water injection and the lower compression of the EFI motor you should be able to get close to 14-16 lbs of boost. I would expect the motor with no other mods be able to hit 190-200hp. Now your in the SVO territory. With ported head and retarded Ranger cam and CAI you should be getting close to 230-240hp. Those are my guesstimates, user performance may vary.
Yes the EFI motors would make more power and depending on your skill level converting to the EFI turbo motor might be easy or a nightmare. It sure aint a no-brainer. And if he already has a carb turbo then I say you work with what you have.
Good Luck.