"will a big block work in a s-10?"

I have heard of someone doing it, but I would think it would be a bear. With a small block in there, the steering shaft is right up against the exhaust manifold.

"Would grafting a Mustang II front suspension work just as good?"

Maybe better. You wouldn't have to fab up a core support to hang the front sheet metal on and a big block would probably fit much easier.

"The rear suspension in the old truck and the s-10 are the same right,leafs?"

Yep.