Hey dpf,
I'm just planning a project. I have a 1983 fullsize G20 with a stock 350 and a 700 Trans, roughly the same setup as you. I want to build an engine that gets me 18 mpg city and 20+ on the IS. At the moment I get 12. No joke. I've just installed a 600 cfm Edelbrock along with the performer intake and filter, new fuel filter and gave it good oil (10/40) (cost about 300 bucks all together used in mint condition, oil new :-)) now I get 15 mpg. you can get more by tuning your carb (rods and jets) and using headers and good flowing exhaust. That much I have learned so far. As for internals, I'm going to stick with a 350 (no stroker) and have it all machined and balanced for sure. Don't know about heads, cam and pistons yet... If you do any changes to your engine please keep me posted whether it's a good idea or not. Thanks,
Max