Yes, Carey is using a water cooled 911 motor out of a 996. 3.4 L or 3.6 L 300-340 HP depending on what you get and how you want it rebuilt. I think he could use an earlier 911 air-cooled motor if you wanted that. However, my understanding as to why he is using the water cooled 911 motor is because the car is already set up for the water-cooled Subaru 2.5 motor. Also, if you want AC, which I do and I am sure most of the other people who are buying this car also want, it is much better to run AC off a water- cooled motor.
As far as the CV Boots are concerned, I asked him about this and he said it would not be a problem.
Believe it or not the cost of the Porsche engine/transmission vs. the Subaru is about the same. Carey told me that the cost of buying the donor cars is about the same.
Plus, for me, I rather have the Porsche engine/transmission in my car over a Subaru. Nothing wrong with the Subaru. Just personal preference.