73 340 SB Rebuild, Need Help Selecting Parts

My 340 is a 4.04 bore, still stock bore. I am thinking this engine is not that warn out but just sat for a very long time. There is very little wear anywhere that I can see and this jives with the odometer reading of just 3047 miles. Could this just a low compression 1973 smog motor with old seals and stuck rings? Bought the car from the original owner (85 years young). So considering all this, did the plan change?
Plan A:
What would the cost be to freshen up this old 340 and what would you do to it? Cost?? Now, compare the 340 engine say spending $3000 total to freshen it up to this idea (see below)
Plan B:
So I am think about possibly doing this:
1. Maybe buying the 408 short block listed at Jegs and Summit. $ + shipping $2500.00
2. Working my heads and using them: Free
3. What cam would be a nice addition to this mix? $250
4. Gaskets, seals stuff needed: $250.00
What would this motor run like? About ?? HP and TQ?

How would this work with my basically stock converter and rear gear. I do like the gear as it's almost perfect for autox in first gear. Nice wide range from 0 to about 55 mph @ 5500rpm.

What's the good and bad about this idea. I am somewhat limited in total funds and this is my toy car to wife limits as well. I am trying to get a freshened up motor done for around $3000 out the door. Is this possible?