Help me build a 318!

How many miles on this engine? Due to it's age (unless it's a low mileage engine which I doubt if the rings are worn out) it's possible it'll need more than just re-ringed. If the piston to wall clearance is too loose the rings won't seal up good and that means less power and fuel mileage. If you do find out you need to bore it get some higher compression pistons. Something that'll get you in the high 8's ~ 9 to 1 comp. More compression will help power and fuel mileage and at high 8's ~ 9 to 1 you will be able to run 87 octane. I highly doubt a 650 double pumper will help fuel mileage because they are generally calibrated for power. For fuel mileage I'd run a Holley 600 vac. sec. or 600 Eddy or if your up to the challenge get a Thermoquad and do some careful tuning. As for the cam a 68 340 4 spd. cam isn't going to help fuel mileage. A newer (71-73) 340 cam might help, or at least equal your stock teen's cam but make more power. But there are so many aftermarket cams designed for fuel mileage I personally would look into them. Get something with lobe centers on 112~114. No more than 260 advertised duration and 208 degrees duration at .050 and .450 lift. Also stay with a straight duration cam, not a split duration. Set up the dist. with as an aggressive spark curve as the engine will allow. Most likely you'll find about 12~14 degrees initial timing with it all in by 2200~2400 will do you good. And make sure to run a vacuum advance and play with the adjustment on it to get it coming in asap without detonation. With all that you should be able to get a good amount more power from it and easily break into the low 20's on the hwy.