318 capabilities??

Contrary to popular belief there's a lot more to making power than only cubic inches. If your short block is in good shape and you install a decent set of heads with an appropriate intake, carb, exhaust and camshaft you should be able to easily reach your goals.

If the engine is worn out you'd be better off finding a replacement. To that end a 5.2 Magnum makes more power than a 340 did and they are plentiful and cheap. If you don't want to deal with en EFI conversion you can use the ignition system from you 318 and buy a carb intake for the magnum. A 5.9 would do even better, but they are a little harder to find.

FWIW, my totally stock 5.2 Magnum when 12.70's in a 4000 pound truck. I used boost instead of spray, but either should produce similar results. Your Duster should be about 700 pounds lighter and put you right in the low 12's if the rest of the car is set up right.