Classic/Antique Car Repair: which engine to put in my chevelle, chevelle malibu, warenty


Question
what can i do to increase the power and efficiency in my malibu?

i have a mostly original 70' chevelle malibu. its in good shape with a 307 and a great finish with little rust. it has a two barrel carb and whatever else that comes stock in that model.

anyways, the engine is old yet still functional but i want a newer drivetrain, one with more power and better fuel economy.

the current 307 has about 200Hp and gets only 12MPG on average.

i have considered working on my current engine but some of the solenoids have been burnt off and i would rather just replace it with a more modern drivetrain.

which engine should i use or what should i do? i would like about 260-280Hp base and about 20MPG's on average.

additionally, hom much should a good V-8 long-block cost me and how much should a turn-key engine run? ( should i decide to completely replace the drivetrain).

the only car knowledge i have comes from the things that have broken on the chevelle and what i have learned while engine shopping on the net.  

Answer
Richard;
  OK well I do not think with any new/rebuilt v-8 that you would get 20 miles per gal. and not one with 300 or 350 + H.P. but you can get a good running car and motor with a std. rear you should get 12-15 mpg. I would get a 350  V-8 turn key if I were you at about $ 1,150.00 you wil get a god one w/ warenty for 100,000 or 7 yrs. and that is great. just type in (chevy rebuilt engines ) and you will find a lot of places. on the web. as far as your tranny if it is good keep it. and the rest .ok