There are a lot of posts here, and I haven't read all of them, but...
Powerglides are decent enough transmissions. You MAY end up rebuilding yours in the near future, but with that kind of mileage on it, it may need it pretty soon on it's own. A more powerful engine may or may not speed up that process. And then again, the trans may keep going for several years. Don't let that be your limiting factor.
As for the rear end, you won't have any problems with the rear end and a 350. If it isn't whining, howling or leaking, a 350 isn't going to give you ANY problems. If it's leaking, replace the seals, change the fluid and go.
-Brad
