I vote for keeping it inline!
A 235 w/ head work, cam, dual carbs, saginaw 4 speed, open driveline and rear-end swap for better ratio, disc brakes, dropped front axle and big wide whites. Now thats the setup! or maybe a 250 torn from a Nova, rebuilt with a big single weber and a powerglide trans? Fresh mexico 292 with 3 sidedraft webers and a 700r4 trans?

if you do go the v8 route drop in a big caddy motor that hangs out of the hood. smile

have fun whichever route you go and post some pics!