Gen 3 conversion in a nut shell

What is your current situation? Broken gen2 turbo engine???
 
What are your future goals for the car? Big turbo etc or keeping it close to standard?
 
If your not after huge HP you could do a rebuild on your current motor but not go all out. No need to fit forged rods if you don't need to. A set of ARP rod bolts might be enough for example.

hmm, its hard really. Every car I ever own I always say to my wife, "this one is just for driving and enjoyment, no mods or anything", however every car ends up being touched to some extent (old vette went from a 290hp stocker to a 440RWHP pig current XP coupe went from asthmatic 302W to a trick and mansweto 347ci stroker running alloy heads full roller top end and forged bottom end).
 
I think the overall goal is a good reliable 230 - 250rwkw as I think its more than enough for fun anytime I want it. But like the idea of fitting an over engineered bottom end to give me a sense of security.
 
(if I replace my current engine I will end up rebuilding my current engine and putting it back in once done and I am not so tight on time).
 
I'm just a little worried that the exchange of the wiring loom may drive the overall price up to astronomical amounts and then i'll regret not building a forged bottom end...

Not having a go at you mate, but with mr2's there rarely a quick or cheap fix to get it back on the road. 
You need to sort out your goals and then work your way backwards.
 
- If you want a high HP MR2, then a gen 2 engine block is not really that much different to a Gen 3 - mainly because everything is getting changed.  And it would also be simpler as you don't need to change looms, speedos, etc. So if this is the case, the rebuilt engine for 4k sounds good. Slap it in, then add turbo, fuel etc, as you know it has a built bottom end.
 
- If you want a reliable 200rkw mr2 (still quite quick) then a Gen 3 with small bolts on (intake, boost controller, exhaust, timing, intercooler) will be your best bet.  Only problem is you need to re-pin loom, change speedo, etc.  Which...isn't that hard, and you could probably do yourself. I did mine when I was still at school :) 
 
 
I suggest build your gen 2 then modify to suit :)

Trying to get a uncut gen3 harness wont be to easy or cheap
Swapping the engine, it will still be a unknown and a slight risk
I would go with rebuilding you engine. Gorilla industries is who I got pretty much everything through, for much cheaper than what can be got locally