If you decide to go with a gasoline engine, stick with the BBC. 454s are plentiful and reasonable, and hold up well to HD use. It will do fine without a lot of expensive aftermarket performance upgrades. I don't know, however, how well it will fit in your truck. I have done a lot of towing; I don't think you will be at all happy with the performance of a 350 pulling an 11K lb trailer, especially if you want to "keep up with traffic".
