Dissembly:
Do it yourself..... Even if you are newbie it wont take longer than 3 hours for you to completely dismantle the bike....... Invest in some tools if you already dont have any. The reason why I'm asking you to do it yourself is because you will learn more about your bike in those 3 hours than you have ever learnt about it since 2001. Taking it apart is easy and its fun...... DIY DUDE!
Engine:
I think swapping the engine is not a good idea. Its better you revamp the engine with OEM parts. Dont go for used dubai ke parts........ go for genuine OEM brand new parts..... Engine rebuilt will cost you around 15k max. It could be less if the engine is in good condition.
Frame:
Find a sand blaster is lhr...... get your frame sand blasted.... it will remove all rust and paint from the frame stripping it down to bare metal...... If it needs repairing find a specialist frame denter. Dont paint your frame...... get it powder coated. It does not have to be black...... think out of the box.
I gave 7k to my denter for repairing the frame of a CD175...... so the cost spent on frame depends on its condition. Lets say it wont go north of 10k max.
Bodywork:
You need to clean the petrol tank and make it rust free with electrolysis. Water .....baking soda....... some DC current..... 8 hrs..... Then you need an epoxy paint inside the tank to prevent it from rusting again.... epoxy paint will not be eaten up by petrol in the tank.
Design a seat pan and hump with foam. Its easier to work with and will work as a mold from fiberglass work from the hump. Keep aside 15k for bodywork....it includes denting, painting and material(including Sieken Paint)
Drivetrain:
New sprockets sets (altered)..... chain......... bearings (japani)......... rims (chrome/powder coat)......new tyres (Servis Cruisers), etc etc Cost approx 7K.
MISC EXPENSE:
10k. Some chrome.....some buffing...... battery...... wiring....... nut bolt galvanization...... seat cushion.....suspension overhauling etc etc.
TOTAL EXPECTED COST:
60k....... for that you will have a really reliable yet extremely cool toy. A Big Boys's Toy.
This is what you will end up spending for a nice machine. However if you can afford more or idealistically I would replace the front end completely with that of a 250cc bike with front disc brakes (kabuli stuff).