I'd get a spec sheet and see the differences fir each engine. See what it would take to get the low-power engine to 325HP or whatever you'd like, and compare with the more powerful, and more expensive, GMPP engine.
If you buy the low-power engine and stick a mild (streetable) cam in it and stuff, you'll probably void the warranty, but you probably will also make more power than the 290HP GMPP version.
If the 260HP has 8.5:1 compresion or something miserable, I'd put thin gaskets on it and try to get 9.0:1 to 9.6:1; anything more and I think you'd need premium (expensive) fuel.
But... I'd swap the gears to something along 3.20s-3.55s for a daily driver. For me, I'd do 3.55s. The 2.73s I doubt are good for much beyond getting groceries and good mileage, and the 3.20s-3.55s would be a good compromise.
Regardless, yours is an Elky rarely seen; most are 70-72 and the 80s styles around here. It's pretty cool, especially since it's a SS. From my understanding, those smog-era SSs was pretty much a stripe/trim package, but it's still cooler than the other ElCamino models.