How do you rebuild a 1972 vw bug engine?

This is kinda long, but if I was going to rebuild a Bug engine, here's what I'd do: First, pull the engine out of the car and strip off the intake, exhaust, and sheetmetal. Drain the gas out of the carburetor. Next, make three areas in your workspace, which you've cleaned well. Call them the "clean," "rebuild" and "replace" piles. Anything in the "clean" pile, you just clean and put back in the engine. Everything in the "rebuild" pile goes to the machinist, and the "replace" pile is self-explanatory. The heat exchangers are the boxes attached to the heads. These are your heating system, and if they leak exhaust they can kill you quick. Inspect them very closely, and if they look even the least bit questionable, put them in the Replace pile. If they're okay, put them in the Clean pile. Put all the stuff you stripped off in the first step in the Clean pile, except for the alternator, distributor and carb. They go in the Rebuild pile. Take the heads off and put them in the Rebuild pile. Strip the engine down. Put the connecting rods, the flywheel, the crank, the cam and the case in the Rebuild pile. Put the distributor pinion, the rockers and valve covers, the head studs, the pushrods, the oil strainer and the crank pulley in the Clean pile. Put everything else in the Replace pile...and think hard about putting the case there too. All the nuts and bolts should go in the Replace pile, but most people put them in the Clean pile. Box up all the stuff in the Rebuild pile and haul it to a machinist that does VW work and that has a Rottler line-boring machine if you're doing the case. Do NOT get your engine line-bored by a guy that uses a portable line bore. There are perfectly good reasons to use a portable line bore--in-frame overhauls of big diesels are those reasons. The alternator goes to an auto rebuild shop. The distributor needs new points, condenser, rotor and cap...or live it up and put a Pertronix Ignitor in. Use this opportunity to clean the items in the Clean pile and purchase the items in the Replace pile. You will also need at least one tube of assembly lubricant (Lubriplate is supreme), a tube of Yamabond 5 to glue the case back together, a clutch, a carb rebuild kit, a gasket set, a case of oil and a main seal--you don't get one in the gasket sets, and I don't know why. Make sure you have a good torque wrench--this is critical. Also get a new gland nut no matter what yours looks like. This holds the flywheel on. It's under a lot of torque and it has ultra-fine threads. You can get a racing gland nut if you like; it's made from 4340 Chromoly steel and takes a lot more torque. It also takes a lot larger wrench to install it--1-1/2" versus 36mm. When you pick up your rebuilt stuff, buy your main, rod and cam bearings from the machinist. He knows what undersize he used, and it's professional courtesy to do it that way. You will probably also save money--the last time I bought bearings from a non-machinist I paid about twice what I did when I bought them from a machinist. Go home and use your VW service manual to tell you how to put the engine back together. Reinstall the engine and, if you did everything right, you'll be a happy person.