I would strongly consider just doing top end work to what you have. It will save you so much in your budget that even if you screw something up and grenade it, you'll have enough left over for a crate engine.
First thing to determine is what pistons are in it. If its the 260-hp Goodwrench engine, chances are it has the TBI dished pistons. Nothing really wrong with them, just hard to get much more compression with off-the-shelf heads. Putting Vortecs on a dished-piston shortblock will get you in the 8.5:1 range (probably what you have now). That swap alone is probably worth 25 hp. The real benefit of Vortec heads (aside from being the best-flowing production head Chevy every did for the SBC) is their efficient chambers. 9.5:1 and 87 octane is easy with Vortecs. If your shortblock has the flat-top pistons (may have valve reliefs), that will get you in the 9.5:1 range. Then you just stab in a cam and call it good.
If you're looking for Vortec heads, you can take your chances with junkyard units, but they do tend to get cracks. They're not as bad as everyone says, but its more common. Casting numbers are 906 or 062 and ONLY found on 350s. 305 Vortec heads are not the same ports or chambers and don't give you the benefits. Better yet, get a brand new pair from Summit for $500.
Check the intake casting. Many of those crate motors came with the ZZ4 intake by default. They are really quite a nice piece. They flow as well as a Performer RPM without the taller profile. Casting number ends with 063. Keep it. If you don't like it, please send it to me. I use them for marine builds to get the better flow without having to design a whole new engine cover.
What I'm suggesting is basically to buy the cam and heads that GM put on the 390 hp crate and call it a day.
... if you have the flat-top pistons.