The largest Rover engine that will easily go into your Series 1 is, as you say, the 2.5litre petrol or diesel. However, this development did not take place until the 110 in 1985 (five bearings came in about 1983 in the last of the Series 3 but still 2.25). And the 2.5 litre engine was never sold in Australia - the 110 only came here with the V8 or Isuzu, neither of which easily go into the S1. (and even five bearing engines are very rare).
So from a practical point of view, the largest engine that will easily fit in the (88") Series 1 is the 2.25, petrol or diesel. Note that the bell housing on these is different from the 2.0, but bell housings are readily available from 2a or 3 vehicles (or complete gearboxes just bolt in). These engines should be fairly easy to find from rusted out S3s (the later engines are slightly improved, but more importantly, have had less use) and you may find new or reconditioned engines with a bit of looking round. All parts are readily available, and you could even overhaul a worn one.
John
With a little more trouble, the 200Tdi or even 300 Tdi can be made to fit, but will require significant body and chassis modifications. Once you start on these there are other engines that can be made to fit, but these get beyond "bolt up".
John
JDNSW
1986 110 County 3.9 diesel
1970 2a 109 2.25 petrol
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