looked like a swing axle to me too, but wasn't 100% sure. Limited travel is the first issue.
I fabbed up a turbo setup on my first car as well, but I had issues from day one. never got it running great, and when it did, i had to be real careful not to get it too hot. If I were to go back in time, I'd of paid for a professionally built turbo motor, or I'd have just committed to a subie or ecotech. Before considering turbos, engines, trans, suspension uprgades, I'd suggest just duning what ya got and making a fun time of it. I dumped more like $20k in mine. Started with a beam car, and upgrade by upgrade, you get deeper and deeper. Before you head down that road, I'd agree with sandawg, to learn the dunes, see how you like the car feel, and possibly consider purchasing a little more car down the road sometime. It is a buyers market right now, and looks like it will be for quite some time.