WOW I can't believe how much they charge you for oil.I used Brad Penn in my motor for break in and regular service.Case of 10/30 28.00. 30 break in 60.00. Bought mine from local distributor.
final size will depend on piston size and running clearance. Say your piston is 4.030.and clearance is 11/2 thousands . bore should be 4.0315. This is fresh not used yours could be bigger from wear.
I think you need to inspect the thrust main bearing and crank. My 360 had the same symptoms .My engine had bad crank rod hitting crank so worn it broke the converter and trans pump.trying to post pics