You don't mention how you are planning on using this sled project. If it's just for fun and trail work, I'd say your money would be well spent on a different suspension. The engine mod's, unless you're looking at doing some grudge racing using a sleeper, probably wouldn't pay off nearly as well. I think you are on the right track though, keeping in mind what you are spending to fix this machine up, what it's worth when you are done, and what a different, newer sled with the same performance would cost. I've driven one of these early Storms with an Xtra-10 installed. Major fun and performance for what you have into it. If the sled is in otherwise good condition, I'd recommend the suspension highly. It gives the sled a whole new personality- one that won't bust your butt ... or wallet.
AL