340 r.i.p.

Sleeve that bastard, and don't think twice. Think: ALL aluminum blocks are sleeved, and they work fine.

The heat on the rods doesn't affect the block one bit. Cranks are easy, rods are easy, etc.

OR go for a late-model roller cam 360, and have awesome midrange torque and newer parts and better heads and better accessory drive and all that shiz.

Heck, even a late-model 5.2 is a helluva a runner. If I's gonna go 318, it's GOTTA be a roller cam, though. There's no reason to settle foe a 318 with flat-tappets unless you just want a street cruiser.