Well as usual I've been waiting in the wings before replying. Forgive me for being blunt.
Bigbrakefuelie, your target motor is a dog. No offense DawG! You would be lucky if you have 150 hp. It was designed as a universal replacement motor for everything from farmer Bob's flatbed to grandma's grocery getter. It has three major flaws: pistons,cam, and heads. The 76cc heads are closer to 78cc's, the pistons are dished and beveled for very low compression, and the cam is dead at 3,000 rpm.
Now for emissons:
CO: basically fuel mixture, richer mixture = higher CO
HC: combustion. Poor combustion = higher HC
NOX: gas created by elevated cyl. temp.
Now for performance:
Higher compression
higher lift and longer duration cam
improved intake and exhaust flow; better heads
Now the problem:
more cam duration and overlap create HC at lower rpm's. also needs higher compression to compensate.
large intake runners in heads and large intake valves reduce velocity and fuel atomization requiring richening mixture: higher CO and increased HC
reducing fuel mixture raises cyl temps; increasing NOX
Now the cure:
Heads; this is where you build hp but be conservative.
Valve diameter: intake 2.02 max, prefer 1.94 exhaust 1.60 max, prefer 1.50 intake runner cc 190max 185 better.
chamber volume, with iron heads 64 - 68 cc, with aluminum heads 58 - 64 cc's. Aluminum heads dissapate heat faster and require higher compression. This will keep your compression in the 9's with your current pistons.
cam: most important keep the lobe centerline no less than 112 degrees, 114 prefered. Duration around 260 degrees, lift in the .450 - .460 range.
Head intake/exhaust flow%: if the ehaust flows 70% or more compared to the intake flow then you need a single pattern cam. If it flows less than 70% use a dual pattern cam.
Use a good aluminum intake (edelbrock performer) with EGR.
This will get you in the 300 hp range and pass emissions.
DawG made me do this:dance
Mike