[greg64]

The GenIII/LSx engines are probably the best bet. Everything in the design is more modern and was actually designed in an era where fuel economy mattered. As was stated, the 4.8 (LR4) is good (what I'm probably going to use in my burb) because design wise, it's nearly the same as the truck 5.3 and still makes very respectable power compared to a GenI SB.

The other option (as a 6 cylinder guy) is the Vortec 4200 inline 6. It's possible, but the electrical is a bit more problematic compared to the LSx. Don't blow the Atlas engine off, as the stock 4200 makes 275 hp (with modern HP ratings). I really doubt many near stock 350s are going to make that kind of power in the real world. Incidentally, these numbers blow the old 4.3 V6 (350 minus 2 cyls) out of the water.

The last, truly key thing is an overdrive transmission and proper rear end gearing. For ideas, I'd look at the current Chevy trucks including the Canyon for ratios and tire sizes. If you've got the engine from a current truck, you should be able to come close on mileage if the gearing is setup right, especially considering our old trucks are very likely lighter than the current ones.

Good luck, whichever way you decide to go.