The 318 can be made to work. Everyone will tell you to find a 360 since they grow on trees and guys apparently pay you to take them away. I myself got a 360 short block for $75. Guess it's sorta true... I have a couple 340 blocks too, which were definitely not as cheap as the 360.
However, I'd consider a 318 if you can spend the money in the right places - quality machine work, good headers, new pistons to gain compression and either a set of RHS or Engine Quest heads. Cam in the [email protected] range, gears and converter if auto will be a good street machine combo.