I would sooner go with a good condition 216 with a T5 transmission and a more modern axle than to swap a 261 in place of a 235 with the original transmission and torque tube.
Why?
Because even with the 261, it will be screaming in third gear at 55 MPH.
There is so much more to gain in regards to performance with a T5 swap than from selecting a different Stovebolt engine.
Every time you shift gears, you find yourself in the optimal power range of whatever Stovebolt engine which you have. No more lugging along until it screams, then shift, then lug, wash, repeat.
