Hey Rob,
I was thinking, since you want to get good mileage and still have a V8, have you considered using a 273? I mean you could use flat-top pistons with the small chamber 318 heads so that your compression could be around 8.5-9:1. Use the original 340 cam with 1.6 rockers and the 273 should have a decent amount of power. This way you still have the rumble of a V8 exhaust, but should get even better mileage than a 318. What do you think?