Hello Phil
I have owned Matchless engine Morgans since 1968 and compete in MTWC hillclimbs, sprints etc with my MX2 Super Sports, so hope that the following observations are helpful.
From what I can see of the photos on the Car & Classic web site the engine is not an original MX2 in that the crankcases are from a 1933 sidevalve Model X or MX engine. They are similar but not as beefy. Crankcase conversions from sidevalve to ohv are common and totally satisfactory if the 1934 onwards crankcases are used, but I'd be wary as to whether the 1933 pattern are strong enough.
I think I may know more about the provenance of this engine and would be more than happy to provide advice/info over the phone so PM me for contact details.
Not saying it's a bad car but it's plenty of ££s for a project.
Incidentally the MTWC is a wonderful club with an excellent magazine, web site, spares scheme, technical advice, social and competition activity. End of advert for MTWC!
Tony Quinn