There is AAA workshop in Sadar,behind F.G cantt public school, there is a mechanic name Aslam he is very good in Baleno.
I have baleno 2004, the only issue in overhalling is that the power of the engine is reduced, coz mechnanical work is done on cyclinders and remaining things, so the horse power is little reduced. Remaing there is no issue in over halling.
If you go for the engine replacement than just make sure that engine is OK. Mostly people will say you for 1600cc. If you can afford 1600 cc than go for it as in 1 cylinder you get maximum 100 km locally.