Very interesting build!
A couple notes from a ford guy:
The silicone only on the t-stat is quite normal. It's hard to find a good gasket for the 351W. I personally run only silicone around my T-stat in my 351W.
The 66 is significantly lighter. Even at the same wheel base, drivetrain, etc. it's a couple hundred pounds lighter.
4000RPM is really, really spinning it. How fast are you moving to rev that fast? Few 351W's redlined from the factory over 5000RPM, though that was as much a restriction issue as wear/strength.
I know Australia had different dates and magnitudes in terms of 1970s compression ratio loss, but a big +1 for increasing compression ratio and seeing what's going on there. At least a leakdown test is worthwhile.
If you haven't already, go through the rear brakes carefully. Aside from the drag issue, you might be astounded at how much dust and rust and crap there is behind the drums.
IMO, if you're not 99% confident in the carb's condition any mileage considerations are pretty useless. It could well be dumping raw fuel at random. Mileage few carbs ever polluted less because they were ailing.
As much as I like a 351W's torque, if you aren't towing something the size of the truck or more regularly, I'd strongly consider some sort of 302 swap. Less internal drag (short stroke, smaller bearings), slightly easier to find parts, and of course just less cubes of air and fuel per revolution.
I can't recommend a 5spd swap strongly enough for this application. You're basically buying 2 more gears. You get the more practical use of first because you can probably use a higher (numerically lower) rear end ratio, and the overdrive 5th. Plus most 5 speeds are probably a more modern (read lower drag) design. If you haven't already, use an internet gear ratio calculator to get a better grasp on what different tire sizes, rear ends, and transmissions will allow for cruising RPM. Very useful tools.
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2001 Prius - 170,000 KM - just got it (no consistent FE numbers yet)
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