Albatross, I'm not sure which gm engine you mean. The duramax is a v-8......to complicated. In the kodiacs(I have one) and other big trucks they used a caterpillar 2116 coupled with the same allison 545 a school bus uses. This combo would be good but I think it's (at least it looks) bigger than a 5.9. Lets remember these old stovebolts have a LONG nose and a solid axle. I'm pretty sure there would be a bigger area than a 1990 chevy pickup has. I don't know the weight of a 5.9 but it can't be more than a couple hundred pounds more than a 235. Since you have leaf springs, they could be stiffened if necessary. Remember a 5.9litre is the engine in some 2500 ram pickups, and capable of producing far more than 300 hp. and torque... off the scale! Not to mention GAS IS 2 BUCKS A GALLON!!!And you only have a 15 gallon tank. It doesn't seem fiscally responsible these days to try generating big hp with gas. I don't know about you but 10mpg or less doesn't appeal to me.
Allow me to reiterate.....school buses sell CHEAP!