Some really good info on the pros/cons of re-powering vs rebuilding the truck engine has been supplied in this thread.
From my point of view I would opt for staying with the 292. I would pursue two options: One, look around for a good used 292, there are a lot of them out there that people have pulled in favor of a SBC or BBC. Number two would be a complete rebuild a 292, either the engine you have or a used 292. Re-building a replacement engine would speed up the down time.
A couple guys mentioned the PCV,, many people are unaware how much oil a faulty PCV can suck up.
Re-powering a truck with a DD or any other diesel can be a bottomless pit. If you look around in the truck wrecking yards you should be able to find a Clark 5spd trans, the 5th gear is an OD in lieu of direct. The Clark 5 spd's were common in school buses. There are other 5 spd OD transmissions from the 1960/70's. I had a '72 GMC 5500 for many years that had one, a great truck.. Another option is a 2 spd rear end..
Several years ago I had a 73 Chevy C20 that had a 454 V8, it was classified as a gross polluter, it sucked up fuel at the rate of 7-8 mpg, had to have it smog certified every year.
A friend of mine had a similar truck with a SBC, he had it converted to a 700R4 OD trans. The cost was $2,800. His mileage improved to 10-12, he was a happy camper. I ran the numbers through my machine, at the then price of of fuel, right at 5.00 a gal., the numbers came up that it would take 60k miles of driving to break even on the conversion cost. I sold my '73. Wm.
