Start by rebuilding that carb, changing your plugs, checking your timing and upgrading your ignition. I'm seeing 14 mpg around town hammering it and 17 mpg if I drive like a sane person with a 3 speed and a 4.11 rear. I run a junkyard HEI out of a 250 and that netted me almost 2 mpg right there. I wouldn't rebuild the engine unless something is wrong.
If you want fast, reliable and inexpensive, Phat can post a pic of a crate 350. If you want cheap and reliable without a lot of work, Phat can post a picture of his 235 with a Holley 2bbl and a T5 overdrive 5 speed behind it.
It all depends on how much money you want to spend.
Chris
