A ported stock cylinder with 4mm stroker on race fuel will definitely be capable of making your 80 HP goal. You could go with a serval and get it ported and make the same on pump fuel, but it's more dollars.
As far as alky vs. race fuel..... It's kind of an opinion, but alky is not for the lazy. It is a cheaper fuel, but requires a little bit pricier carbs and it will need to be purged in between rides. Race fuel is fun, but you have a totally different looking plug then what you are used to hearing about.