More power can be squeezed out of the engine, but it's expensive. You can bore out the cylinders and get oversized pistons; TAP sells some pricey Piper cams; the intake and exhaust can all be reworked. You will have to decide for yourself if the end result is worth all of the money and effort.
Possibly the best option is to drop in a 20V turbo motor out of a '91 200, early S4 or S6. The biggest obstacle here is that the supply of these engines is low and demand is high. Anyone who is considering an engine transplant simply MUST visit Brandon Hull's Ersatz S2 site. It is a very detailed description of the evolution of his car.
