Well , sorry to hear that , it was a pitty that the damage was that serious.
Lets start now. If you have an 8v with mech tappets you should probably stick with that engine , its the best and rarest of them all. By default the produced somewhere between 121-125 hp instead of 118 for one with hydraulic tappets and if previous owner had installed 48''s dellortos then i am guessing it could build up up to 130hp (if setup properly). On good thing with with mech tappets is that they can rev as long as you want even near limits without any problem even if the oil is not that good. Only problem that they are not shelf adjust but thats not reallyyyy a problem as access is easy , and adjusting them nothing that happens often. Plus they have better design , with that alfaromeo logo on them.
Now , as for rebuilding the engine , there is the issue of how much you want to spend on the engine. One solution is to install default pistons(or bored for couple of mm). If you go that way you can add little more more on polishing ports for better performance although since previous owner had 48's it is a good indication that they must have already been polished. Another solution is to install from 16v although i am not sure if they fit on the valves because heads on mech 8v are flat and not dished , only pistons or if the fit this will increase compression . Another solution is to install pistons from subaru 1.6 (couple mm bigger diameter) modded with rings to fit on alfaromeo rods which are better and probably cheaper.
Last solution is to go 16v , but it will require quite a lot of mods , you will have again to service the engine completely just to be sure that you will not have problem in the future and get use to the sound and feeling of injection instead of carbs. You can sell parts of your old engine , like heads or carbs (quite expensive on ebay).
If i were you i would stick on 8v. You know the status of the engine , it will be classical , rare , good performance , carbed and probably will cost you less than any other mod.
Sprint 1.7 '85