1500USD to build as much horse in a 360 as possible. What would you do?

Just a couple things to think about:

* It would be nice if you were able to borrow a "torque plate", even if it would cost you shipping (closer the better). They bolt to the block for boring and final honing to simulate the stress of a head being bolted on. It will help keep the bores round, help seal and the rings will last longer.

* 318 heads might help compression and torque, but the ports are too small to make good, higher rpm horsepower. But "302" casting closed chamber heads have been made to work well with proper porting.

* Most of the older 360 heads are similar. You can't go wrong with light porting, particularly in the valve bowl area. Original 1.88" intake valves can work as well or better than 2.02" valves. But 2.02" intakes are easy to find and opening up the seats with a good valve job will position the valves on new valve seats further in the chamber and help flow. (Sinking valves, like after several valve jobs, hurts flow.) Blueprint/equalize the combustion chambers, but keep all of the valve heights the same.

* Domed pistons raise compression a lot but can raise it too much for your fuel. Aftermarket flat top pistons would work well, if they fit into your budget. KB and Speed Pro are good options, but FOLLOW THEIR DIRECTIONS. You can mill the block and heads a bit too. (Don't forget to mill the intake to fit because head and block milling will bring the heads closer together and the intake manifold will sit too high and cause problems. Actual OEM compression was always less than the advertised ratio.

* Once you start changing things in the rotating assembly, you will have to rebalance it. It gets a little more complicated with the 360 because it's externally balanced. It should have a counterweighted balancer/damper up front as well as a weighted converter/flexplate or flywheel at the back.

* Adding much horsepower without modifying the rest of the drivetrain with more gear, converter/clutch, suspension, etc. will not work well. All the power in the world won't do anything if you can't get it to the ground efficiently. So you can't get carried away. Stay conservative with the cam.
If you have the original stamped hydraulic rocker arms, find some spares. See what the cam manufacturer suggests for your cam choice.

* Here is a mild 360 combo with a variety of exhaust manifold and header comparisons.
http://www.moparmusclemagazine.com/...pp_0307_mopar_crate_engine_exhaust/index.html