I just picked up a 87 TII pullout for a good price. I am up in the air about using it or selling it.
I have only played with REW motors for the last 12 years. I am aware of the issues- weakness areas of the S4 but as with everything else there is usually alot of BS that floats around. I have the option to swap out irons if needed with some rew ones.

 

The S4s have the weaker rear iron, but as long as you have a good tune and don't detonate, it shouldn't make a difference.

 

Once I overboosted and detonated my s4 rear iron. Then I detonated it again. Then I overheated it.

Then I upgraded the turbo and made 386 to the wheels. Then I blew off the MAP sensor line and detonated it. Then I detonated it again.

Finally I pulled the motor apart and there was still nothing wrong with it. I think it's just like of the draw. I ended up putting in s5 irons because I already had the motor apart. I measured 13% increased thickness in the s5 iron at the dowel pin landing.

 

I have an '87 T-II in my 1st gen:

http://www.cris.com/~Asam/Res7/Res7.html

putting out 390 rwhp at 14 psi. There was more at 15, but the Centerforce Dual-Friction clutch couldn't handle it. Now that I have an ACT, I may turn it back up.

As I understand it, the only caveat on a well-tuned s4 motor is that is needs to be doweled, if you make over 425 hp.

BTW, the car is for sale.

 

Thanks for the info guys. My plan is to run the rotating assemble out of the S4 motor and housing's with rew irons. Going to run RE (cosmo) upper and lower manifold. Turbo will be in the 75-80mm area. Goal will be 600+ rwhp again.

 

http://aaroncake.net/RX-7/projecttina/index.html

 

With RE irons, the "weakness" of the S4 engine is immaterial since that weakness is mainly thinner castings around the oil filter dowel and some thinner castings in the water o-ring support area.

Just for the record, big power can be made on an S4 engine. I now have my GT4088R turned up to 16 PSI, so it should be running about 500 RWHP on an S4 NA block. The car put down just over 400 RWHP on 13 PSI so I don't see 500 at this point being unreasonable. I've even detonated it a few times (need to sump my tank) without issue.