Realistic estimate Please
I second your vote on going with a 904.
When I swapped in my 340/727 with schumacher mounts into my '65, I had a heck of a time getting the 727 to fit.
I flattened the pinch weld. No Go. Cut out the pinch weld. No Go. Cut out a section of the tunnel and
finally it would fit. Had to create a compound curve patch panel and weld it in to finally solve the problem.
Concerning your SB 904...make sure your slant six converter is the same era 904. Pre-'68 904s had a different input spline to the torque converter than the '68 and up. A '68 and up tranny will have more upgrade options for a torque converter than pre-'68. As far as stall goes...the slant torque converter will flash a little hirer with that new found power in you 360.
Driveshaft length will be the same as long as you don't change the rear end.
If your 66 had A/C then it already has the v-8 accelerator pedal. If not...you will need to get one or make other mods to make it work.
My mechanic said he should be able to do it for about $600?
Not a bad price...but it will go up once missing/broken parts and typical challenges are factored in. Although harder to do it yourself, you will KNOW your car and that knowledge is PRICELESS.
So far everyone has give some awesome advice. Some of it I had to learn the hard way over the last few months. Good Luck.