This is a delima, one I'm sort of facing with my LS1. Next semester, it's either stroke it and performance pack from SLP, or an LS2 crate enging with Performance Pack from SLP. Money isn't an option for my job, but in your case, how much are you willing to spend? A good LS1 crate motor can cost you between 2-3k. If you're willing to spend it, what you would be saving on gas milage would help in the long run. If you're going to go ahead and upgrade the LT1, I suggest a major retune. They're good, but my friend's 97 z28 shuts off at 120mph. This isn't a problem for many people because they just race at the tracks, but we do a lot of highway racing etc. If you're willing to spend about 2-3k on your LT1 you should be able to get it to 350hp no problem. One fast solution is a procharger, that's worth a few good horsepower and is right in the price range there. Some long term solutions are true duals, headers, a porting job(not worth that much horsepower, but it helps in the long run), an SS hood, some 3.83-4.10 rear gears will stiffen up your quarter mile but make it impossible as a daily driver.

104k babied miles? That's actually really good. An old engineer told me once that a quarter mile of full accellaration was the equivelant of stress on your car as taking a 400 mile trip and back babying it.

 

id say you go all out and just procharge it