Little 318

http://www.summitracing.com/parts/EDL-2177/

Will this work? Or should I go down to 262? Do I need the cam and lifters or cam alone?

Edelbrock cams aren't the best, they "work" but there are much better designs out there. I had a Lunati Voodoo 256/262 in my 4-bbl/dual exhaust 318 (stock bottom end) and it had a slight lope at idle and pulled really strong above 2000 RPM. Below that was about as good as a stock 318 2-bbl. so there was no loss of torque, just added mid- and top-end power. Comp XE262 would also be a good choice, can't really go wrong with any of the newer fast-ramp cam designs. Just do what has already been said and keep the adv. duration around 250-270, on the smaller side if you have stock compression and/or drive in thin air...