I have a friend with a 355 with 7000 miles on it. just needs a cam Ill ask if hes interested in selling.

That blue-print motor is a great choice for the money. Its a rebuilt 355 with 193 casting center bolt heads and a hydraulic flat tappet cam, all in a 1pc rear main style 87-95 block(still has provision for a mech fuel pump). That would be a nice direct swap for you in longblock form. However, if you change your mind, I have a freshened up 1991 350 longblock with very low miles on it for sale for $550

-Richie

The 355 is definatly a great choice, it seems to be suited better for what you want to do, and its only a couple hundred more than the SD one. it really boils down to what you want, if you want a 355 buy it

id say get a vortec longblock have the guides cut and swap to better srings so you can swap the cam to something bigger, and get a vortec intake and youll be good to go, probably do it for dam close to the same money as that... theres reman'd vortec LBs on ebay around 16-1800 shipped... just try to get the intake used, you can even get a good used cam too thatll save some cash... i was in the same dilema wanting more power for my 87 and although ppl may say drop a LS engine in it and i totally agree but for the amount of work involved and the extra parts needed for an ls swap ie fuel pump, engine mounts, fbody exhaust stuff, and the truck intake wont clear the stock cowl/hood(wont matter if you have aftermarket but may have to massage the cowl a bit), tranny needs to be swapped to a 4l60e or there is something to make your 700r4 work but thats extra parts and money you can probably get the engine and trans as a package really cheap may or may not be able to use the stock gauges etc... check thirdgen.org they have a whole section on swapping LS into 3rd gens and you can get a really good idea of what EXACTLY is neeeded from there... that said, i DO NOT doubt you can do a 5.3L swap for $2200 maybe less, i do think it will be more work then using a conventional small block but will also most likely be faster and get better mpg just my 2 cents wanted to give you a little more info and insight funny stuff i just read the whole thread and realized i posted before and that this is OLD lol not much posting goes on here i guess :/