I am installing an O-320, and in addition to Peter, have talked to several others who have completed planes the same way.
My goal was to match or improve on the performance of the Mooney I used to rent (pre-citabria days) the mooney I rented could flight plan on 160kts at 11 gph pretty reliably with me and a co-pilot. It seems that with an O-320, 165KTS at 8 or less gph should be possible.
I have also focused on reducing drag where I can, like internal rudder stops, but I have used an external comm antenna. I am using the Sam James cowl, and plenum which looks to fit a bit easaier, because the engine mount places the engine nearly 2 inches further forward. I am also using a constant speed prop, but in my case I am using the WW 151, they will give you an extended version for no extra cost to make the James cowl fit easier.
I have also focused on keeping it light. My panel has only AS, ALT, Comm, TXPDR, Fuel, EIS, and a single axis ADI pilot with my existing 196.
Since the 151 is less than 30lbs, I am also using an old starter. MZ4222, which is fairly heavy, but also uses the fewest cranking amps, and as a collateral benefit is CHEAP, bought a used/rebuilt yellow tagged prestolite for $100.
O-320's are comming down in price on the used market, as others go for HP. I bought a first run engine, had the local machine shop check it out and rebuild the lower end. I installed 4 Lycon cylinders with forged (9-1) pistons, all of which were balanced in terms of weight and flow. In addition to a new carb, and new mags (slick trade in deal) I have less than $12K in the engine.
My only hesitance in all this is the starter. My injected Citabria started out with a traditional starter. I installed the sky-tec HT Inline starter. It was good for clearing a flooded engine, BUT it would also spin the engine fast enough to overcome the impulse coupling, and fire the non impulse mag. So, I made sure to keep the right mag off when starting, and it would still fire on impulse only after I releasesd the started and the egine began to spin slower.
But, with a carbed engine and impulse mag, the slower turning should be fine.
As to the sensenich prop, several who have tried them on an O-320 recomend against it strongly. You can NEVER exceed 2600 rpm with that prop on an O-320. This means that when you cruise, you have a partially closed throttle, giving lower power, AND lower efficiency.
If I had to do it over, I may have used a hartzell, and the James shorty cowl. But only time will tell.
I can tell you from talking to others, and my experience flying an IO-320 in my citabria, these are very smooth engines, general consensus seems to be that the shorter stroke, as compared to a 360 makes them a little smoother. I know that with regular maintenance, my 320 was very reliable. When I sold it there were 1800 hrs since overhaul, and it burned only on quart in 11hrs, compressions were within new spec. This engine spent about 20% of its time doing landing practice and another 15% in acro work, as it was a training plane before I bought it. I could easily run it at 5.5 gph for evening cruises at 2250, lean to rough and nudge it back in. In this setting it was glass smooth. And in the Citabria, you felt every rumble.
If you are going to buy new, I bet the $$$ just do not work out, the price to the more powerful engine is too close. But, if you find a good deal used, and work with your local clubs there is some cost savings to be had.
My hope is that with the cowl, and light weight, I will be able to close the gap in terms of cruise, somewhat closer to the 360 crowd. Climb with a CS prop is pretty darn good anyway. But in any case, I should be able to meet my goals with this engine.
Goals: 1st: Light, 2nd: CHEAP, 3rd: cheap to operate, 4th: meet performance goals.
I also hope to finish this plane for less than $55,000, and am on target to do so, even with a nice interior and many new parts. Went slow build, and looked for deals.