318 Rebuild suggestions?

I'll double check with my friend about what really needs to be changed out, see what's really necessary to swap out and what can stay. His only mention of getting a new block was worst case scenario like if the machine shop screwed it up. I just find the idea of scrapping a good engine for a brand new one being cheaper a little hard to follow. Especially since this one is only down a little on power and mpg (yet still hauls better than our perfectly good Ranger lol). It averages 16 right now, at peak I've had it up to 21mpg (which is why I find AJ/FormS's claim of 32mpg with a 360 a little hard to believe since I've never heard of that out of anything stock over 4 cylinders other than a Feather Duster). So far from what I've seen, a 318 makes light work of a Dakota, if it was a full size Ram then sure the 360 might have a mileage advantage but for a Dakota the 360 only comes close (12-14 reportedly vs the 16-21 I've noted with mine). It might match that with expert tuning but that sounds like a bit of effort and $$$.