a- Am I correct with this assumption that I can drop it in, using the existing trans and intake/exhaust manifold?
b- Anyone in BC have one they would be willing to let go? I'm in the Lower Mainland.
a. you are correct; almost: you will need to relocate the water pump (
made by Pre '68 Dave). And, you might have to swap the "front mount plate" from your original engine, if the 261 used side front mounts.
b. place a Want Ad for a 216 in the Swap Meet