Any modern engines or engine builds for modern results?

The reason you see terrible gas mileage in the Magnum-powered Jeeps is because the drivetrain is very inefficient and they are big, heavy SUVs. The Grand Cherokees that came with Full-Time 4x4 had a viscous coupling between the front and rear driveshafts (kinda like a torque converter), I'm sure you can imagine what having essentially 2 torque converters to push power through does to fuel economy. Those transmissions were never very efficient either, some guys on here with A-518 swaps are getting a few better MPGs but their drop in 1/4-mile times says a lot about power being thrown away. Manual transmissions FTW when it comes to gas mileage.

With regards to weight and especially emissions affecting gas mileage... A modern 5.7 Hemi Challenger weighs a hefty 4200 lbs and typically get low 20's/high teens MPG average with mixed driving. People who have swapped 5.7 Hemis into their classic Mopars that typically weigh at least 500 lbs LESS and don't have to worry about emissions are averaging mid to high 20's, slightly less if they didn't use an O/D trans or tall gears.

Since my 360 broke I'm going to build basically a 318-based version of the same thing and just swap over the stock Magnum heads, Air-Gap manifold, get a good modern street cam in the 220-230* @.050" range, put in some KB hyper flat-tops and top it with a 600 cfm Edelbrock or maybe Street Avenger Holley if I can find one for a good price. This combo is nothing new and is proven to make around 300 HP at the crank if done right (machining, assembly, tuning) and with good gearing 20+ MPG, at least on the highway, should be no sweat.