[Zoomad75]

I'd take a close look at your overall gearing and tire size in addtion to the engine. Even a fuel injected 350 is going to suck gas if you have deep gearing and tall tires. Right now you don't have an O/D so that is going to cost you some when cruising.

Low (numerical) gearing in the axles will net more fuel economy but at a trade off of power. If your tires are close to stock size changing to a lower numerical gearset wouldn't be that bad. Dropping from 3.73's to 3.42's would lower your cruise RPM's by quite a bit. Add a 700r4 in place of the TH350 and your cruise RPM's would drop even more with the smaller ratios.

Problem is that you are talking about a big heavy 4wd truck. That by itself is not commonly looked at as a high mileage vehicle. Look at it this way, a Fuel injected 350 truck from say 88-95 still barely managed to get 15 mpg on the highway. And thats with better areodynamics than our barn doors have. At most I'd say the best you could do by changing to a fuel injected engine, OD trans and small gear ratios (3.08 to 3.42's) and small stock size tires is 12-15 mpg on the highway. It will be a dog to drive and you would still have to keep your foot off the floor for maximum economy.

Heck even a new Silverado with a 5.3 does not have a highway rating of 20mpg, its less. The problem is everything is a trade off. A higher hp engine might give a little more economy since it is building more power at a lower RPM and running better, but that doesn't mean that you are going to get 10mpg better if you build a 300-400 hp engine. Add that to the mess with the gear ratios and tire sizes and you have got a big puzzle to work out.

What is the truck's main use? DD? Only see's street duty, no off-road? Towing? Weekend toy? Is it lifted or stock?

I'd say that your current engine is not worn out, but probably out of tune. I get barely 8mpg in my K5 with a 350, well tuned q-jet, 3.73's, no OD and 35" tires, so 6-8 mpg on yours if its stock (my assumption) is telling me something is out of tune. Edlebrock q-jets are good carbs, but it is still possible that the settings are too rich for what you need. Might be a good time to pull the plugs and look at them. if they are dry, but sooty black, the carb is running too rich. Not just at idle, but on the main meetering circuit as well. The carb might need to be leaned out some. Also look at the condition's of the plug wires and think about a switch to a HEI distributator to get rid of the stock points setup. You should be able to improve your mileage a good by a good bit. Lowering the maximum speed you drive helps a ton too. wind resistance builds faster, the faster you drive. I've noticed a big change when driving 75 vs 65.

I'd take a good look at what you already have before dumping $3500 on a new crate engine, another 2 grand for an aftermarket EFI setup and a rebuilt 700r4 for anywhere from $500 to $1500. All that cost to get maybe 5 mpg better. At the cost of fuel in the mid $2 range, you would have to drive it a long time to even see any payback from all the parts you installed. If you got the coin to drop in it go for it, but if you sole goal is to save money at the pump it won't pay off. You'd be better off spending that money on a beater 3yr old Cavalier to drive to work and leave the truck for fun on the weekends and bad weather days.