the 307 isn't a bad little engine every just automatically screams for people running smaller displacement chevy's even though theres nothin wrong with it.... sure the 350 is a great motor blah blah blah.... i personally am sick of hearing about your 350

so go ahead and build the 307 a little bit, i'd clean her up a bit see what she needs, if cylinders and rings look fine leave the bottom end alone, cam looks a little worn you say? then replace it with a little bigger cam that has good torque, use some rhoads lifters, roller rockers are optional but not neccisary....other than that, throw it in your T and enjoy it