Hello.
I dont think there's any problem for fitting this engine in a Fiat 128.
In Spain, we had a Seat called Ritmo Crono which was fitted with 1600 twin cam engine. Later on, we had the Ronda Crono, fitted with the 2000 twin cam engine.
As 128 engine bay is not that different, I'm sure there's no problem for fitting it.
Fiat also had the Ritmo Abarth with a twin cam.
Good luck!!
Best,
Manuel de MIGUEL
IRESA S.L.