Without really knowing you I would say the easier path to happiness is a vtir and then doing some minor mods when you have the cash in hand.
The path of the LS is fraught with danger. I would be very surprised if you could outline a budget to do-up an LS and have it come in cheaper than a stocko 96 vtir. If you are serious about a motor swap, wheels&tyres, some body mods and a respray it would be more than likely to start heading towards DC2R prices. You have to factor in other stuff too cause you are starting with a 15 year old car – suspension, seats, sound system and interior to name a few. Then there is all the nickel and dime crap where you are spending 20-50 bucks down at the parts store every Saturday. Don’t forget fitting out your toolbox either.
On the other hand, you might be a top notch home mechanic who spends an hour or too every night working on a car project and is able to do everything himself. In which case the LS is a great option.
Lastly, if you do go with the LS I would strongly recommend having a daily driver (charade or something like it) that you can drive while the LS is on axle stands.