Dear Samson, welcome to The Automotive India!
What is the model year of your Ambassador? Which Isuzu engine do you want to fit - the 1.8 petrol or the 2.0 diesel? In all probability you would have to go for a used engine as new ones, even if available would cost you more than the value of your entire car. Yes you can fit disc brakes on the front wheels PROVIDED you have access to a good workshop. You may have to make alterations to the suspension depending on what model year is your car. Yes you will have to get the engine transplant endorsed in the RC.
There are a couple of good Ambassador restoration threads on our Forum like this one http://www.theautomotiveindia.com/fo...-new-post.html
. Search for them, they'd answer a lot of your queries.