The 196.6 inline six was AMC's OHV redesign of their flathead six. AMC marketed the engine as their "economy six"; more efficient than the flathead. This engine has a historical value as it was this design that was used for a die cast aluminum version ('61-'63). See http://amcrc.com/oct05feature.html
for a picture of how AMC marketed the all new '63 Classic. This was AMC's bread and butter car, embracing thrift, economy and useful utility. As usual, non-enthusiasts are usually attracted to AMC cars for the way it looks, and then they dream about doing an engine swap after they open the hood, finding an inline six. To swap in a V8, using AMC parts, one would need to find a '63-'66 V8 model in a junkyard (Classic, Marlin or Ambassador) and get the engine, crossmember and transmission. This will bolt in and bolt up to the stock drive system. AMC's torque tube drive system provides excellent traction by acting as an extra long ladder bar applying the torque reaction of the drive wheels very near to the car's center of gravity. Not respecting the car for it's merits, and considering all the work it would take to convert it to a home spun hodge podge engine and drive system, the initially interested person will probably do better to consider another car.