Making power out of the 318

Dodge Ram 1500 Engine

99 Dodge Ram 1500 V8 Magnum

I would budget less for the machine shop and more for gas. Find some deals, assume every engine is junk but try to find a decent bottom end and probably a junker with a decent intake and carb. Sell the excess parts off cheapish to pay for the small stuff and try to get an engine assembly together for around $1000 out of pocket, or $500 if you can't find a decent bottom end and plan for $250 on pistons and $1k for machine work which should keep the engine under $2k.
If you're patient and resourceful, hopefully you can score an engine with a trans for cheapish - look for junk motors with the intake and other accessories you'll want. You'll wind up greasier but money ahead.