If you do the U cut, you should really box the frame to get the most out of it. Stacey David over on Gearz did a similar type of modification to a '32 Ford, but his was on the bottom of the rail to allow for hooking up the headers to an undercar exhaust system (his has cutouts).
I would suggest either block huggers, or alternatively, fenderwell headers. You might take a look at Camaro/Nova/Chevelle headers. It might take a mix and match set (Camaro/Nova on one side, Chevelle on the other) to make it work. IIRC, on a smalblock, a Camaro header works on the rivers side, Chevelle on the passenger. Not sure if that holds true with a big block, or a Big Bolt for that matter.
