700r4 needs a rebuild -advice please

[walls]

I just purchased a 78' K10 4x4.
The trans has got a burning smell and wont do 2nd gear.
I'm assuming it's going to need a rebuild and I bought it knowing that before hand.
Owner said it was a 350 crate motor 3.55 rear gears.

Here's my questions-

1. How do I figure out exactly what I have?
-I don't want to rebuild a trans that is not suitable for my purpose (normal road driving)
2. How do I know what HP level to have it built to?
-is stock rebuild sufficient, cost is definitely a factor.
3. Should I just find a new trans and swap it out?

Any help or ideas will be appreciated