My opinions as follows - Either pick up the 3.4 like Bill says. Or get a 3.4 from a 94 and newer camaro and take the whole fuel injection setup, etc. for 170Hp. I went with a camaro 3.4 / 5-speed for an RX7 conversion that I did. Drove it for over 100000 miles in 5 years getting 28MPG with the 4:10 gears in the RX7 prior to selling it.
The Quad 4 2.3 liter is a much better engine than the old 2.0 or 2.2 isuzu or even the 2.5 pontiac (Tech 4). I had a Tech 4 in my '85 S-10. Fuel economy is as bad with the 2.5 as it is with the 2.8 that you had, however less power. Put a hot cam, and ditched the fuel injection for a Holley 350 CFM carb and distributor from a 1980 Pontiac Sunbird. It woke the 2.5 up, however I did end up putting in a Buick 3.8 that I had from another project.
The new Ecotech engine (Found in Solstice, Cobalt, Opel Speedster, Saturn Sky, etc.) is actually GM's world engine designed and manufactured by their Opel Plant in Germany. Nice engine that you can get up to 1000hp out of if you need - just not for street at those levels. For the street, get the GM performance Supercharger for it.
You can pull any fuel injected GM V8, overdrive trans and EFI from the Mid 80's or newer and get more power and fuel economy than the 2.8 had. Visit
here for more information. Another choice is the 4.3 liter that you will find in many S-10's
Scott