After a considerable amount of research it looks like the following three options are my best choices for a 1973 914 1.7L rebuild.
1. Rebuild the engine the with the same displacement. This would require honing out the cylinders and installing new pistons.
2. Rebuild the 1.7 as a 2056. This would require new cylinders, pistons, rods, 2.0 cam and possible matching to make the valves bigger. Then new valves.
3. Buy a 2.0L motor, increase to 2056 by buying new cylinders and new pistons.

All of this assumes the heads are not cracked or need repairs. It appears that option 3 would be the best if I can get a 2.0 liter motor cheap. Plus option 3 would allow me to not have to split the case if there are not any issues. My car has been sitting for about 25 years and has around 80,000 miles on it. My dad was the original owner. The buyer never did anything with it. He parked it on a concrete slab with a roof over it and put a cover over it.

Opinions and advise?

There is always some 914 owner selling off there perfectly good 2.0, or bigger, to do a six swap. It's usually an engine the seller has put many hours and dollars into making nice but the siren song of a six has called to them and can't be ignored. May not be one at this very moment but it seems to come around every couple months or sooner if you are asking for one. It will save you time and money. So I would not be in a hurry but have your money together and jump when the right one comes along. Don't worry about location. A quick call to freightquote.com will have a truck with a liftgate to pick up and deliver for a couple hundred. I ship engines all the time, it's easy. Put your original engine aside and rebuild or not as time and money allows. You can usually sell the 2.0 you aquire for what you paid or more. This way will also give you time to concentrate on other things the car will need. Rust repair, transmission, upholstery, etc.
Good luck with the project.

This is the most cost effective, and ultimately quickest, path. Unless you want to rebuild yourself (like climbing the mountain, because it's there), this is your best choice. A good value option, with plenty of build info/details will come along before too long.

you forgot the intermediate option: 1.9L or 1911 build.

I've heard a few guys say they prefer the 1911 because it's a quick revving engine that you end up running up in the rev range more often... or something along those lines.

Do you want to spend the most money
2056 big/4

Or the least amount of money
A( used motor of unknown history)
Buy one that runs

I will likely be selling a rebuilt 2.0l by spring.

Have two builds in process - one for me and one to sell to offset cost of a six I recently acquired.

I took this route. For $850 I bought a 2L engine from Gerald Shaffer which included dual Weber carbs and Pertronix electronic points.. The plan was to punch it out to 2056. However when I took the heads off I found the pistons were already 96mm. I cleaned the engine up, put it all back together and fired it up.

3 years later it's still running good.

Spoke, you got lucky with that.

None of your options consider fuel delivery. Could add cubic $$$ dependent on what method you use.

I have a friend who has two 40mm carbs he said I could have.

Fess up ,which 911 motor did you buy ?..the 2.4 CIS maybe

Guilty as charged.

A lot of the guys doing engine swaps will include the fuel system since it's not needed on a six conversion. Many are really nice engines. A couple years back I picked up one for a local owner. $1K for a documented 2.0 with everything. Prior owner was swapping to a six. It requires a little patience.

Thanks! This is a great suggestion. I am sure there will be many other things to work on since the car has sat for 30 years. My brother did see it start about 10 years ago.