Find some stock springs to use for the winter. Coilovers are just asking for trouble in a winter driven MN car. Too much salt. Get a set of stock springs with stock top hats and some basic struts like KYB GR2s, and save the nice stuff for when the weather gets better. The car will perform better on snow and ice with the softer springs anyhow.
Actually, they have wraps for the coilovers to help them with Winter weather. Saw them on nasioc. Not sure if they work or not but its worth a try. The biggest stress with our salt and coilovers are the ring collars. They tend to get weak and break.
I've ridden in this car when it was between Craig and yourself. Post up a video of the "knock". I was under the impression that it was "normal" for a motor with forged components.
The guy you bought it from, unless its changed hands more than once after Craig, only had it for about a month I believe. He drove it for a while and realized he needed a truck for work and hauling his snowmobiles. The only modification that I know of is he tinted the reverse lights, and he may have put in an HID kit (even though I told him not to).
I've been wondering how a kit like the Morimoto Mini H1 (http://www.theretrofitsource.com/product_info.php?products_id=3181) would work in bugeye. I suspect it would be worlds better than a bulb-only HID kit.
No, if you look at the link, they're a projector lens that retrofits inside of the stock light housing. Bulb-only HID conversions on bugeyes are awful. The reflector does a piss poor job with a halogen and the HID bulb just makes it worse. Poor coverage, lousy pattern, and lot and lots of glare for everyone else.