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I would probably go with Scenario 1. Maybe that’s because I did a similar deal with my Falcon. I bought a cheap 302 and just threw it in so that I could enjoy driving it around. I even borrowed a Holley 500 cfm 2 barrel carb and used it until I bought a new intake manifold. Later on, I added all the good stuff (cam, intake, carb, headers, etc).
 
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