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Dead nuts reliable combination. The engine doesn't make enough power to even-remotely hurt itself and the trans is designed to handle twice the power. Driven with care and respect should last forever...
As an Olds guy I too would prefer that you went with another Olds engine and a bigger small block is a perfect match to your transmission. Any Olds 350 will make considerably more power than a 260. Its an automatic 50% increase in power minimum. Not enough... ? work that 350 to the tune of 300 HP or so and you are 3 times the HP your car was born with. With your small light weight body should make for a 13 second car with the right rear and gearing.
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