The brilliant part about the Iltis is the motor; it's a bog standard VW motor that has been around since Centurion was a rank. Lots of parts availible, and lots of go-fast RACING parts too.
Building a ~180 HP Iltis would be like falling off a log, and with the addition of a turbo, I could build a ~320 HP Iltis without much trouble. That would be a hoot and a half.
My back-of-the-napkin Iltis design would be:
1) Pull the gas tank, and scoop out all the little anti-slosh foam balls. They break down with time, and jam up the fuel system, and are the root cause of 90% of Iltis fuel system troubles. While I was at it, I'd send the tank to ATL to be fitted with a proper rubber fuel cell, an internal fuel pump (Toyota Supra pump would do fine) and a provision for a fuel return line.
2) Do a little VW research, and find a cylinder head and manifold combination that had provisions for electronic fuel injection. This can be fabbed up from scratch, but it's easier sometimes to just use off-the-shelf parts. Connecting the thottle body to the Iltis military airbox will require some thinking (and some sillicone rubber hose) but isn't rocket science. Proper head selection should get you more compression, better flow, and a hotter cam as well.
3) Hook up a decent aftermarket EFI computer and distributorless ignition system. This gets you away from the Iltis POS carb (carbs suck in general) and eliminates distributor caps and rotors as points of failures. You pick up the crank trigger wheel as a point of failure... but it's easy to carry spares of those, and the performance and reliability bump you get from not having to deal with the carb and distributor is signifigant. Depending on the cam and head, this should be ~ 120-150 HP instead of the stock (ha!) 80-ish, and in something as light as an Iltis, you'll feel it.
4) While we're at it, replace the stock Iltis plastic rad cap with a proper metal one. This might need a metal overflow tank - no big deal.
5) Pull the stock Iltis non-self-adjusting (!!) drum brakes and throw them as far away from the vehicle as possible. Replace with discs on all 4 corners. Might get lucky and find a VW package that bolts right up, otherwise investigate stock car or maybe Formula Atlantic brakes. Might need new master cylinders.
6) Yank the stock seats and replace with something FIA certified from Sparco or MOMO, and install proper 5-point harnesses. Weld the roll bar to the floor, and do door bars forward to brace the tub across the weak point, to keep it from folding in half when you jump it.
This fixes all the major reliability and safety issues, and adds a great big heaping helping of YEEHAA!
DG