86 318 build

Sounds like you have a perfect starting point.

Here are two 318 builds to give you ideas of what you can do.

http://www.hotrod.com/howto/113_0304_318_small_block_build/

http://www.moparmusclemagazine.com/techarticles/mopp_0409_318_engine_build/viewall.html

I recommend popping the engine apart and seeing how it looks before you go any further. Get an idea of what shape the engine is in.