With the investment in this engine would you not be better off using a dry sump system both to keep the oil in the crankcase to a minimum and to ensure the complete lubrication of the engine?

Pete
Yup, I would be, but given the block design and the integration of the pump on the outside of the front of the block, I'm disinclined to reengineer the housing.
I'm thinking a simple windage tray should help settle things down in the sump. Another rather cool feature of this block is that the oil drainback passages run to the bottom of the girdle, so it could well be possible that the oil from the head could be routed to exit below the windage tray. I need to look at it a little closer, but it looks fairly possible that the only oil I'll need to really worry about roping the crank would be primarily the oil slung from the crank and rods. It's not nearly the rain storm and garden sprinkler arrangement the A-series is.
My tentative scheme is to replace the plastic oil pickup with a braided line, and I haven't ruled out an external pump to oil the head and draw crankcase vacuum. It wouldn't need to be a very large capacity unit. By plugging the main oiling circuit to the head, let the stock pump handle the bottom end, and going with an external pump, I think we could better control the head lubrication, possibly direct oil to critical areas on the exhaust side to better dissipate heat (Thank you, Sparky) and possibly do so with less oil as we're losing the hydraulic lifters.
Chatting out loud on this one - nothing carved in stone yet.
There's a local guy that actually reproduces the plastic thermostat housing in Aluminium for that Rover motor.
Unfortunately we aren't friends anymore. 
That is a whole different worm can. Part of the problem with the K overheating can be traced to the thermostat location. There's not a lot of water in this block, and it's prone to thermo shock in standard applications that haven't been well maintained.
We'll also likely vent the water jackets in the head to prevent steam build up. The earlier K blocks had such a feature, but the later ones did away with it. As stock applications changed, the radiator and overflow tank placements also changed, and the vents were deemed unnecessary by the MG/Rover bean counters.
In the war between engineers and bean counters, as engineers retire, bean counters receive bonuses.
And thus ends this weeks tale of the demise, rebirth and recurring demise of the roller coaster known as the British auto industry.