If you want a 327 you have part of what you need to build one.
A 307 has the bore of the 283 at 3.875 inches and the stroke of the 327 at 3.250 inches. Get a 350 block, get 327 pistons pressed on your rods. Throw the crank in the 350 block and you have a 327.
However, I like 307's. And they can make good power as well as good fuel economy if done right. You have $1200 to play with, providing the engine doesn't need a complete rebuild and your looking to step up the pep of the little mouse and not making it into a fire breather then it's easy.
First off, get a set of heads off a 305, the 416 casting.
These heads have 1.84 intake and 1.50 exhaust valves and a small 58cc chamber. This will give you right at a 9.5:1 compression ratio which is ideal for pump gas. Next install a summit racing cam part number SUM-1065.
This cam has duration @.050 .216 intake and exhaust and .454 lift.
Get a set of valve springs to match the cam.
Add a double roller timing chain. A set of small tube 1.5 inch primary headers. Dual exhaust with H pipe into mufflers of your choice.
Retain the intake, carb and ignition system you have.
This combo will not only give it excellant low end torque but it'll also improve the fuel economy. The cam has a slight lopey idle so it'll sound good.
If you find a set of 416 heads that don't need alot of work, then you'll have a good bit of your cash left over. If the heads need guides then it'll get a little more expensive. Either way, you'll still come out to the good money wise.
The 307 got a bad rap for 2 reasons. Number 1 is chevy never made a performance version of it. It was strictly a economy engine. number 2 is because chevy had a bad run of cams during a model year so the cam would go flat and usually take out the rest of the engine with it. However, it's still a small block chevy, given the right parts it'll come alive and run very nicely.