Whether u use an extension or not.....the transaxle mods are the same.
If you use the fan housing whether it is under the seat or under the tank.....the engine mods are the same.
If you use the engine without the fan then you must duct or direct the air flow as needed for either one. With under the seat being more difficult to do. Also no low speed parade or city driving. You could modify a set of love jugs to blow air in the right place and ride some city.
If you know folks having trouble with an extension......then they are missing something in the set up.
An under the seat with the fan intact and working would be the easiest to build......straight up....use mostly stock vw parts.
An under the tank with extension and fan intact and working would be a nearly normal vw engine. But all the custom design and machine work to make the extension. There is not a place to buy these parts, YOU have to make them from scratch. So that does take a level of skills there.
An engine without the fan will have to be .0015 to .002 inch looser in the cylinder bores. Be full flow oil mods. Hoover airplane oil mods help too. Large oil cooler. Large oil pump. Big cams and big carbs also help it run cooler. So the engine has to be built to specifications other than stock or anything you can find in a repair book.
Of course on any mid set up you will have to design and build your own rear suspension.