OK I have been working on, rebuilding, and racing BB Chevy's for decades so here is what you are in for. The 366 (I have both a 366 and a 427 and lots of parts) has not one but 2 thermostats with HUGE 3" hose fittings on water pump, thermostat housing and radiator. The 454 is a puny car/light truck motor with 1 1/2" hoses and is not up to the task and will NOT FIT so don't buy it, it's not the same as a tall deck no matter what anyone tells you (and a lot of the parts will not interchange). Rebuild the old 366, any motor rebuilding machine shop can do it for around $1800 or so, why not get it rebuilt? Or you can buy a BRAND NEW 427 tall deck motor from Chevrolet for @ $3500 with a full 2 year guarantee. Carb to oil pan, water pump to flywheel, drop it in and don't worry about it any more, that's the direction I would go, talk to a chevy parts dealer. Ya it's more than you want to spend but it will drop in and then full speed ahead. YOu could look into a NEW short block from Chevy and some 366 heads will fit a 427 block so you might up to the larger motor. You need to check out what you have. As far as RPM's don't worry, these engines don't pull hard till about 3200 and up to 4000 or so, my drag motors would turn 8000 with truck rods and crank so you already have that covered with your parts.
My friends and I argue all the time about diesel vs gas motor. Diesels are great till you need some repairs and then hold on to your hat, it's gonna get expensive FAST. I just talked to a guy that had head gaskets put on his 6.5 ford diesel, $4300. You can buy a completely new 427 chevy motor for less than that. Not to mention diesel 14 qt. oil changes, $30 oil filters, expensive fuel filters you change more often than your oil, $400 starters, glow plugs, 3 or 4 batteries, add it up. You pay at the pump or at the shop, I'll pay at the pump with a gas motor thank you.
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