I also prefer original but my 1954 235 gave out and I had the rebuilt 261 on-hand. After I find and rebuild a 54 235, the 261 will again reside on the engine stand in storage.
I have put an older valve cover (54/55 235) on the 1960 261 (just for the heck of it). I toyed with painting it gray to look like a 235 but I painted it 261 alpine green. Go figure?
The 261 is noticeably stronger than the 235, but the 235 is quite adequate for cruising comfortably with the 3.55 rear-end conversion (another non-original component but it cannot be seen).
I'd keep your old engine.
If no one posts a recent cost of a machine shop checking out the engine/block (for cracks and for the crank and cylinder specs), call a few local shops and ask what it costs. Post your findings here.
For what it's worth: if I was rebuilding an engine and the crank and cylinders needed to be machined, I'd also replace the cam bearings.
