This.
edit - ok after actually reading the thread, looks like you really want to keep this car. I would buy an LQ9 or LQ4 shortblock, throw a cheap set of 241 or 243 heads on it, mild cam, and ls6 intake manifold. you can easily buy the motor and swap parts for $3k, and youll have 400+ rwhp, and 25mpg highway reliably. an LT1 won't do that. ive had 4 of them, and will never buy another one.