Hi Dave! Great to see your TD3 project. It will cost a bit to make a good job but, it can be done. My own RD350/TR3 sort of project is progressing. I would suggest you consider going 350 if you can because, there is that extra perf at lower tune, and for just track work you don't have to stick to a capacity limit. Mick Abbey in Stockton is a great race tuner and has proven aircooled RD350 ability with 50+bhp @ 8,000 rpm from his basic tune using VM28's.

Another option is Ron at Fahron who does a 370 conversion of 250 cylinders.
Cheers
5port