A few things..
1) your 78 firechicken is a tank.. over two tons is not unheard of..
2) your milage will be no better with that 4spd and the 78's rear gears..(my bet 2.73 or 2.43)
3) add up all the little things after the engine cost.. the clutch to work with the m-20/21/22, the flywheel, the motor mounts, the headers, the oil pan if the one on your 5.3 doesn't clear, the front dress, that may not clear the engine crossmember with out fab work.., ele fans if not already in use.. rewiring the car to limit electrical noise, (add many ground straps everywhere)
the lsx is a great engine, but you'd be better served spending the cash in other places,, like with 343 or 373 rear gears and a tremic 5 spd kit..
those years f body had tallish tires.. and the smog rear gears.. jive great highway milage, but around town.. not so much..
most times the lsx swap the a/c compressor and engine crossmember want the same realstate..
I looked into it for my 86SS, the 5.3's are cheap.. but it's all the little crap that adds up fast..