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The biggest problem with the smaller smallblocks is what is called shrouding of the valves.This is because there is not enough area between the edge of the bore and the edge of the valve for good airflow.This means the engine gets less fuel/air mixture and less fuel/air means less power.Anything you can do to help airflow will help the 305.You will be limited on valve size especially with a higher lift cam.Make sure you have clearance between the piston and valves and between the cylinder wall and the valve(some 2.02 valves may hit the cyl.wall ;with some high lift cams I beleive the 1.94 valves may hit.).As stated before the smaller ones tend to run better in the midrange up so you could gear accordingly albeit at the expense of fuel economy.
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