Thanks to everyone for all of the good feedback and comments so far. You all are confirming a lot of what I'm thinking, and the concerns I have. I would likely not upgrade the car to the 440 for the reasons you're mentioning. Too much cost in alterations beyond just the motor itself. I'm not necessarily looking for huge power, and I think if I took the project on, that I could get enough power out of a toughened up 318. To answer some of the questions you all have asked:
* The owner isn't looking to sell. I found the car and called him to ask if he'd be interested in selling. He said he's always interested for the right price. I got the feeling from him, during our conversation, that he holds a lot higher opinion of the car that I/we all do based on what we see, so he'll probably not part with it for a bargain price. But we'll see.
* I haven't firmed up a budget at this point and I've got acccess to the necessary funds. However, I also don't want to get sucked into a huge money pit either. All in I'd probably like to keep the project around a $15k-$20k total investment. I'll do a lot of the work myself.
* I haven't had an opportunity to get under the car yet as its sitting behind the guy's shop as I didn't want to waste my or the guy's time until I at least had some kind of feel on what all I should hone in on, and on a reasonable price range assuming the car is a good find and good platform to start off of, based on the research.
* He hasn't had the 440 in the car yet, but I'd expect to redo just about everything on the car, engine, drive train, suspension, etc., anyhow. I'm not looking to just get it into drivable condition, I'd like to build a nice combo driver and show car.