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My 2c
-forget the Edelbrock heads, too expensive-find some '96+ vortec truck heads, some of Edelbrocks heads are pretty much exact copies of these they are so good, and much cheaper (I see them on craigslist for less than $300 a set often). The small Edelbock cam (204/214) is a good choice, I've had one in a 1970 truck with a 305 and it worked well, if anything you could actually go smaller if you were to change the rear gear for lower RPM cruise speeds.
-Don't worry about the compression, the 96+ heads have a MUCH better chamber design and detonation won't be a problem with flat top pistons or less.
-Personally I stay away from aluminum rockers, they will break eventually. Stockers suck too, and avoid those gimmick roller "tip" rockers, most of the friction is at the pivot. That leaves the steel roller rockers as the best choice but they are expensive. Maybe as a compromise buy some cheap aluminum one and get a couple extra to have on hand/ in the glove box for when the time comes, probably Speedway Motors would be my choice for good quality/ price combo. And you might as well go with the 1.6 ratio with such a mild cam.
-Any good double roller chain will do the job, assuming it's not a roller cam block they are really common and inexpensive. I'd probably advance the cam 4 degrees as others have mentioned as well.
-the Q-jet recommendation is a good one but not a deal breaker, an Edelbrock carb tuning for mileage instead of performance (they sell them both ways) wouldn't give up much.
Not sure what kind of car you have but I had a 1980 malibu with a 350/350 and 2.29 gears and it got a little better than your goals with absolutely no thought given to economy, and the motor was completely wore out.
If you were to switch trans, and stay with an auto, I'd recommend a 200R4 over a 700R4, they have a much better gear spacing (700R4 has too low of a 1st gear).
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