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Sounds like a fun project.
Is it all of mericopa(?) county that has emissions or just the city of phoenix?
Either way, porting is difficult to have with still passing the sniffer, but it can be done. You should be able to perform a mild streetport and pass, especially if you maintain cats during the testing phase.
Some other areas to look into might be getting the rotors coated (turblown.net in AZ does it). If you decide to reuse the rotors from the over heated engine, I would invest in new rotor bearings. You can get away with a cheaper rebuild by just replacing the apex seals, springs and side seals, but for reliability - I'd replace the rotor bearings, oil seals, etc as well.
Be sure to check the step wear on those irons too, nothings worse then putting together a nice new rebuild with warped irons!
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