Ok so what I am gathering is leave the 318 in there, put a new Holley Double Pumper(what cfm would you recommend?), get some cal-tracs, a pinion snubber, some racing shocks and possibly some new springs and also get some sticky tires.
Yep. Other than you don't need Cal-tracs and a pinion snummber together. They basically do the same job and having both won't be any benefit. You might be just fine with good HD or SS springs, a pinion snubber, drag shocks and sticky tires. If you still have traction problems replace the snubber with cal-tracs and that should take care of any problems there. On a 318 I'd think a 650 Holley should do fine.