In my opinion an 8.5 out of a gn would be overkill. Just start searchin for g body rears until you find something over the crap 2.14 grears. I wouldn't worry about it being a posi, it isn't like you have a turbo:biggrin: A v8 car should have something decent. the 200 overdrive would be a good idea. Don't have to be brf tranny. From what I've gathered pacesetter headers and replacing the 2bbl intake and carb with something different wakes the little buck up. Sometimes you can find the headers used with the o2 bung already on. As far as heads and cam go that is your decision what you want to do. Headwork is expensive. I've heard mixed reviews on cams for the 3.8.
I was going to do a different muffler, 4bbl intake and carb, shift kit, electric fan, and build a cold air/ ram air snorkel setup on my 87 limited, but I got too many cars so its either getting sold or put in storage for a much later project. Don't get too crazy on exhaust. 2 inch should be plenty with a good muffler.