This might sound weird but I had this problem right before my tansmission went out. My theory is that there wasn't enough ATF or the pump wasn't putting enough pressure on the clutches to hold them solid.
Pesonally I would do a compression test on it and a fuel pressure drop test to see if it's getting proper flow. If you do a V8 swap your probably want to make sure you at least have a 4l60 trans. It will also take a wiring harness and an ecm wich all add up quick for cost. With either option (...
Check around the fittings going to the heater core as well, they were cheap pot metal pieces from the factory and a very common failure point (same fitting as the one on top of water pump). Whatever it is, after you get it fixed, it is important to replace the oxygen sensors; antifreeze will...