I ran hyd lifters in my 261 for a while until they got noisy so switched to solids, (must keep solid cam with solid lifters), now days there is a fix for this prob. see pre68daves blog for all this info (also can check with Langdon's Stovebolt for lifters). Word is that there are some inferior hyd lifters out there and nos ones are really pricy, that said I really like the quiet running of that motor. Today I'm running Bulldog solid lifter cam from Delta Cams, like it a lot, very mild easy to set lifter, engine sounds great and pulls strong.
I am also running the 848 head which has combustion chamber volume in the 70s vs 83 or cc or so, can look this up if you need. 848 is a bolt on swap if you have one but don't thinks is that big an issue. My intake valves are the bigger Powerglide just under 2", just surfaced the head vs a mill job. I've run several different sets of single and dual carbs on this motor if you want to go that route, currently have a new 390cfm Holley on a 235 that is really nice. I wouldn't run an old carb unless its in perfect shape, will drive you crazy, get the best one you can find, again check with Langdon's.
I would highly recommend the HEI distributor, that alone made my motor run better and start easier.
Here's some good info re. 261s from Jim Carters, oiling system on these motors is a bit different but very important to understand.
http://www.oldchevytrucks.com/blog/index.php/2010/02/the-forgotten-261-6-cylinder-engine/Best of luck
Jim
Note, See lots of good 235s for sale cheap, on sites like trifive.com, many of those folks pulling good inlines and usually sell for not much money.
