I've done some preliminary research and the sm420 fits behind the ls... But I have no idea how. I'm sure the 4L60 or 4L80 would be much better, but cost would take priority. Same with a brake/suspension upgrade. That would have to come around a few years down the road.
Caso, this has been a long process getting here. To save you some time, here's the jist of it: re-ring, partially rebuilt head, hone, found long crack on driver's side.
From the conversation this far, I gather this would be your most adviseable decision: have the shop check compression, oil pressure, and valve clearances on the "running" motor in Kerrville. I would consider trading the welder because, while I need it eventually, I don't need this size of a machine. A $400-$600 would do. This is a $1200 welder, but I got it for $600.