AK49BWL
GMT400 Forever!
Based on what your driving style are, I'd stick with whatever is cheaper. Machine work in not inexpensive, so a LM7 swap is likely going to be cheaper. The LS are going to have to rev more, but they make higher HP and are very inexpensive.
I'd also look into 4L80e swap while you are there. The 5.3/4L80e was offered in the early GMT 800 2500LD regular cab and some 2500/3500 Express Vans.
My Sierra is currently a manual, and will be staying manual. I've always loved shifting myself.. I do have my Blazer's 4L60E shifting pretty well the way and where I want it to, but it took a lot more time for trial and error to get right than it would have taken if I'd just had a stick in there lol. And I really...don't like torque converters.
I'm surprised you say your Dad's suburban 2500/6.0 is slow. I just bought an '06 same engine and it feels considerably faster than my 3500 CCLB SRW 5.7. The truck is heavier, but not by much. Either are heavy and not super fast compared to any 1500, though.
The suburban 6.0s had higher HP ratings than the 2500HDs, probably because the they figured the trucks were going to be used for work vehicles and detuned them more.
Like I mentioned, it may just be that particular truck. When he bought it, a few weeks later he literally blew the muffler off (blew it in half actually) because the idiot previous owner put on a terribly restrictive muffler that was seriously too small for even a 5.3, much less the 6.0. It woke up a little after he got an OEM-style muffler put back in, but it still feels weak to me. Probably something else going on with it... He's had nothing but issues with that truck. But, that's the only 6.0 truck I've driven, so I probably shouldn't even use it as a basis for any decision lol.
4.3 swap?
jk
For sunk costs, I'd go with the 383 or a straight up 350 and build something else with a 6.0 if you feel froggy.
I have thrown that idea around some, just build lightly on the Sierra, and drop a 5.3/T56 combo in the 2wd Blazer for fun/speed demon-like stuff because I do get, as you say, "froggy" sometimes haha..........honestly, I wish I'd done that when I bought the Blazer, because the 4.3 in it had to be rebuilt not long after... P/O killed it pretty bad. But eh. It's my "good gas mileage daily driver truck" that gets up pretty good and does 24mpg highway right now lol.