new engine

Not hatin' on the 318 idea, but if you're going to go through all of the hassle to change the engine, you might as well get the extra cubic inches of the 360. Check your local Craigslist and maybe some surrounding areas. I'm sure if you keep your eyes open you can find a good deal on a gently used engine. Like the others have posted above, some things will have to be changed (exhaust, cooling, flex plate) but they can be done relatively cheaply. Good luck!