If you want to stay with the type 4, it would probably be best to rebuild yours . . . but like RetBugtech said, get ready for some sticker shock when you start shopping for the parts. With a type 1 engine, I'm not afraid to throw a bunch of used junk parts together and see what happens. That's not a good idea with a type 4. Either do it right or don't bother.
Jake Raby over it Cleveland, GA can probably supply you with any of the parts or machine work you need to build a near bulletproof type 4 that will run over 100,000 miles, make way too much HP for a bus and run cool and get great gas mileage at the same time. But, it'll cost you.
Or, you can convert it over to a type 1 engine. A stock 1600 will push a Westy down the road at a reasonable speed . . . as long as you don't hit a strong headwind or a steep hill.

I've been running a type 1 in my 73 bus for almost years now . . . I think I'm on my 5th engine, but I'm probably still better off dollar-wise than if I'd fixed the blown type 4 that was in it originally.