Tony, is your 261 completely stock? What is your timing setting and main jet? What kind of air cleaner are you using?
I was messing with mine last weekend and I had been running a bit rich with a #62 main jet in my Rochester B and I changed it to a #57 and it runs a lot better. The plugs were getting fouled out when I was going down long grades and it would run rough at the bottom. Now with the #57 and a slightly lower float setting the engine runs a lot better and the plugs don't foul. I had been getting about 15 mpg with the #62 jet, hopefully I will get 18 or 20 now.
I was going to put a 3.08 in with the SM420 I have now but I am kind of thinking of going with a 2.73. When you calculate out the gear ratios, 4th with a 4.11 gives you almost the same speed as 3rd with a 2.73. 2nd gear with the 2.73 falls between 2nd and 3rd with a 4.11, which is a pretty favorable place for my driving. 1st actually becomes useful, slightly below 2nd with a 4.11.
I think if I was going with tall tires I would use a 3.08 but with normal to low profile radials a 2.73 makes sense. I do haul loads occasionally but I only haul around town.
With the 2.73's and 28" tires a 2.73 would turn 2300 rpm at 75 mph in direct, 2800 at 55 mph and 1800 at 35 mph in 3rd, 2400 at 20 mph in 2nd, and 2500 rpm at 10 mph in 1st. There is a fair gap between 2nd and 3rd but I think it will be ok.
