Regarding the exhaust: I replaced mine myself the beginning of this year with a stock standard bosal exhaust. The previous ones insides rusted away so it made a bit of noise. My feeling is that I definitely want the stock exhaust - I really like the traditional flat four vcw sound from a kombi engine, also these exhaust will last many years as they do get very hot so rust is less than in say a normal car. Obviously this depends on the distances you travel - going only to the corner cafe will create more vapor that will not evaporate as the engine doesnt get that hot. These autovillas were meant for long distances so this should not be a problem. In soeaking to a guru from the beetle club it was suggested that the stock exhaust works better as it was engineered specifically for the komby. That is why it am keeping my stock one. It is expensive +- R900, but easy to install yourselve. I am not sure if you get these standard ones in stainless? The heat exchangers is another issue
I am not sure about the valves, but I was under the impression that only 2 litre engines were made with them
It definitely sounds as if you do have hydraulics. Mine is not so I check clearances EVERY tune up. By the way - it seems that the single carb setup is a nono. Read Ratwells website...
http://www.ratwell.com
Here is what he has to say about hydraulic lifters:
"In 1978 VW introduced Hydraulic lifters to the Type IV (GE) engine. Because they were only used for 2 years on the baywindow bus, they attract the usual disdain and confusion that the Type IV engine, fuel injection and other late model parts and features have to endure. Bob Hoover thinks they are a good idea and like the rest of the Type IV improvements, so do I, coupled with the fact they've never let me down.
Over and over you will hear how they were a bad idea and they should be removed from the engine but the fact is that VW produced over two million vehicles (mostly Vanagons) with these lifters and there was never a single recall. That number doesn't even count that number of hydraulic engine equipped beetles running around in Mexico and Brazil.
So who's right? The beetle owner who has never seen one and who insists that they should be removed from every engine or VW? Let's find out."