Pieces of steel in cylinder??
My intent with the car is to have it as a daily driver with some added HP for a little get-up-and-go when I wanna get-up-and-go. I won't be taking it to the track or anything, just a grocery getter that goes fast. Initially, my plan was to add headers (done), upgrade the intake, carb, and air cleaner, and pretty much call it good. But that was just a beginner's plan...
All the more reason for a 5.9Magnum
The major increase in low-end torque will be worth every box of MacNcheese you have to choke down. And the bonus is that, with the 5.9, you won't have to be using as much throttle to get the job done, as the teener would have needed. The potential for a reduction in fuel useage that, that the higher compression 5.9 has, over a cammed up 318 (however small the cam), will pay dividends in the long haul.
And finally; the go fast parts (headers, carb and intake) will have the potential for larger increases on the larger engine.
A 360 is "only" 42 cubes bigger than a 318; but those 42 cubes at stall speed are worth more than any bigger cam that you could ever install into your stock-compression-318,ever. Those 42 cubes at stall-rpm, are probably worth more than the headers, carb and intake all put together, installed on your 318. In terms of performance; 42 cubes is like adding 13% to the rear gears behind your 318; like going from 3.23s to 3.55s, while simultaneously going up in stall some 300 or more rpm..................... without actually doing it. And this is just ar stall-rpm.
By the time you get your heads gone thru, and cylinders rebored/repopulated, and whatever else you're gonna find wrong in that pile, a used drop-in 5.9M is likely gonna be cheaper, or at the very least, within reach. And this is a zero-dissappointments swap.