Easiest route for sure is to keep the th350. Lots of people go that route with good success. But if you want to really improve your fuel economy you will definitely want an overdrive trans.
The 4l60e (basically an electronically controlled 700r4) and 4l80e are both electronically controlled and came behind many variations of lsx’s, and lots of people swap those in as well. If you get an engine/trans pullout out of a pickup or something the nice thing is the stock PCM can be used to control the engine and the trans. It’s not a huge deal to swap in the 60e or the 80e usually, the biggest things you have to deal with is the VSS (vehicle speed sensor), and making sure the trans bolts up to your existing transfer case (or swap in a pullout engine trans and tcase).
It all depends on what your goals for the truck are and what level of fuel economy you’re willing to accept. I’ve heard of people getting 15-16 mpg out of a 5.3 swap with a th350 or 400, but I’ve heard of as much as 18-20 out of a 5.3/overdrive. I’m building my truck to be a DD that I can drive across the state to go hunting, so I went with a 4l60e but there’s nothing wrong with keeping a 350, especially if it’s in good shape and you will just be driving around town.
Sent from my iPhone using Tapatalk