some of what you're saying here is running completely contrary to "cheaper than dirt" build.
first, i'd get that motor running and establish a baseline. compression, cylinder balance, leak down tests. check the plugs while they're all out. visual inspections on everything-- gaskets, seals, core plugs, oil, coolant. all of that with the addition of the mileage taken together should give you a pretty good idea of the overall health of the motor.
from there you should be able to assess whether it's a good candidate to run as is or if it will need a rebuild. if it needs a rebuild, unless it's DIRT cheap move on and find a runner, you'll be *miles* ahead-- even better if it's a 360
you start talking about machine work, getting the "heads and block milled n stuff". machine work is expensive. i'd suggest saving that money for a more worth while endeavor (360, magnum motor, etc)
working on the assumption that the motor is a good runner, i see no problem with a good ol fashioned "rattle bomb rebuild". oil pump, seals, gaskets, water pump, valve seals. stab in a cam (dealer's choice here, but i'd keep it toward the small side), and a new timing chain. top it with a used 4bbl intake and carb (625 afb will be cheap and effective).
you do not need some new fangled HEI nonsese. the stock electronic ignition is more than sufficent. headers can come later, run the manifolds for now.
besides tracking down the correct V8 bell, you're going to need a flywheel at the very least. you may also need a clutch and pressure plate. thankfully that stuff is widely available and inexpensive. no need to get all aftermarket crazy here. the fork, z and bell mounts may need some sorting as well so keep that in mind. of bigger importance is if the V8 crank is drilled for the pilot/manual trans. which, you won't know until you pull it and have a look see.
i highly recommend getting everything you can-- mounts, brackets, wiring, radiator (the inlet and out let will be different for a slant) and even as much of the exhaust as you can manage, battery cables, again-- everything you can. this will all help tremendously in swapping over.
