There are some amazing personal watercraft and snowmobile two stroke engines available these days that I would readily consider for a power source for these cars. Emissions have come a long way with direct injection and active valve technology. They really are a world away from the Indian used engines you mention.
To expand on the argument for my rules 1 and 2 now that my hook has caught a big fish:
Two stroke engines have the ability to reduce complexity and weight of these cars. Many are lightweight and easier to work on. This would allow for lighter cars, as well as potentially less DNFs.
It is my opinion that some of the light weight cars could be running even smaller tires than the 10" wheeled choices used now. No one uses 8" wheels because the tire compounds are substandard.
6" wheels are the next step down, have significantly wider compound selections (even greater than the 10,13" choices) and the packaging constraints would readily push students towards simpler construction.
Would everyone go this direction? Not necessarily. Just like everyone hasn't converged to a single design direction already.
Currently today there are teams that use up to 15" wheels and engine displacements of 250cc up to the limit of 610cc. Some teams are also planning to push right up to the new limit as well.
The two stroke engines would potentially come at a cost of decreased fuel efficiency and power under the curve. Leaving it up to teams to decide if their power/weight requirements overrule their fuel efficiency and packaging requirements.
The 6" wheels would allow more compound choices but at the risk of no data available currently and a substantial loss of longitudinal contact length and potentially overall grip.
Both of these options are also available at lower costs than their counterparts for the budget minded.
I think opening rules to allow the cars to safely become lighter and simpler through lighter weight and simpler choices would help DNFs so the students can take the weight out of one more location. Rather than feeling confined to running certain choices such as the 13" tires and sport bike motors and then desperately trying to hit weight targets by running carbon monocoques, carbon suspension links, and undersized hardware.