That's a great idea, but it would take some big $$ to get it to a reasonable level.
This is how I'd do it: (More or less, would research it more if I was actually going to...)
1. Auto Beams 3S motor from a GT caldina (Most common beams 3S)
2. Brashboy modified PowerFC to suit (you really need to surpass the factory 7250 rev limit.. and it's the cheapest aftermarket ECU that can control VVTI on this engine.. Still 2.5k though

)
3. Engine rebuilt with balanced bottom end, TRD Altezza 13:1 pistons, new gaskets etc. (To make sure it can survive in the high RPM region)
4. Head sent to Kelfords for a cam grind (No aftermarket cams are available that I know of... There are for Altezzas, but not the FWD engine)
5. TRD Altezza 3SGE quad throttle kit (Fits the FWD engine)
6. Phoenix power headers, or custom made
7. EP71 starlet (Because they're cool, and light)
8. Modified MR2 LSD gearbox to suit a FWD
9. Those slicks with sidewalls that crinkle
I reckon you could get into the 12s with that, but it would probably cost you...
Hmm.
Motor = 2k?
ECU = 2.5k + tuning = 1k
rebuild + balance + etc = 5k
cam grind = 1k? dunno
throttle kit = 1.5k
headers = 500
starlet = $1000
Mr2 gearbox = $500
slicks = $2k?
I mean that's 17 grand already, and you can probably safely double that for a realistic cost.
As for how it would go? Well it's anyone's guess really I suppose.
I confess to being not particularly interested in drag racing, so I cant see why you'd want to spend so much on a car that you only get to race for >13 seconds at a time.
A FWD drag car at that level isnt really good for much else.... you'd definitely trailer it there and back.
The 240hpATW beams motor was running on 98 octane, so you'd probably get a bit more running the motor on C16 I suppose?
You'd very likely also need beefier rods than factory, you could probably get some aftermarket 3SGTE rods that would do.
As well as a lot of various other things that I havent thought of.
If you've got the $$ then go for it, but I doubt you'd have a quick 3S powered starlet on a shoe string budget.
If you could find an M/T beams motor from a celica, you could probably get into the mid/high 13s with the stock motor/gearbox wedged into a starlet I reckon.
The only problem being, that there are bugger all manual transmission beams powered celicas around, and even fewer that have crashed. So finding an engine can be a PITA.
If anyone was serious about this, I'd be happy to share any knowledge/info/experience etc that I have with these engines so far.