Jammer,
I am currently installing a 292 into a '53 two ton chassis with a '33 cab. We are running into a few issues here and there, but none are that tough to fix. I haven't driven this rig yet, but I am confident that it will be head and shoulders above the 235. In a few weeks I will be driving it and can tell you more. I think you should forge ahead with the 292 and the more modern tranny suggested earlier. Also, there is really nothing sinister about a key switch starter! Our forefathers would have used them if the technology was available back then.
Mark