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70mpg, eh? Sounds cool. You should be able to do quite a bit on a budget of $4000.
Have you seen Chang Ho Kim's >100mpg competition CRX?
If it were me, I'd see what I could do with the stock motor in place. Assuming it hasn't been hotted up, it's a good performer. You can also look up Ben Jones' IRX project, a partially-completed quest to install a Honda Insight hybrid drivetrain in a CRX. It runs and drives, but has no interior.
Ben, are you ever coming back to the country to finish it?
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