A 261 starts out nearly 30 cubic inches bigger than the 235, and it's a bolt-in swap with only minor differences to deal with. It will also respond better to "go-fast" modifications like increased compression, boring, stroking, etc. The later-model 292 six is another option, but there's a lot more work to making it fit in your early chassis- - - -different bellhousing, different rear crossmember, motor mount fabrication, exhaust changes, etc. The advantage of using the 292 is that it's a considerably newer engine, and parts aren't as hard to find. You've got another 30 cubic inch advantage over the 261, also. 292's aren't famous for fuel mileage, but they're very rugged, and they respond well to modifications like a 4-barrel carb, dual exhausts, cam changes, etc. For torque considerations, I think I'd choose a somewhat warmed-over 292 over a 305 small block V-8, or possibly a low-compression 350.
Jerry

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