Convert a live axle diff to IRS

[alga]

I think the MX-5 route is the way to go. Over here MX-5's in good order are pretty expensive, too (£2000-4000), but one could get the frame with the powertrain from the breakers for around £250 (but this might be an effect of availability of cheap RHD wrecks from UK). The project will end up costing you at least £3000-4000 anyways, so it's worth considering getting an appropriate donor.

If you're determined to use a solid axle, you're indeed better off looking at Ron Champion's Locost or derivatives, and would get better advice on other forums, like http://locostusa.com/forums/