I would suggest one of those blue 6.5hp clone motors for a really cheap, reliable and powerful enough engine.
If you're handy with a welder and want something that will be REALLY fun get a 200cc+ motorbike motor or a snowmobile motor if you're in an area where there are snowmobile engines.
Shocks can be found on ebay, not sure of the exact price. I imagine you don't need that much travel, having seen yerf dog karts before, so the ones on ebay should be fine. To be sure of eliminating bouncing you MUST get shocks which can be revalved for different compression and rebound rates. That was you can keep changing the valving until it has the characteristics you want.