To go with the 350, you'll need a new transmission which means a new tcase and a centered rear axle. You might could cut the bell off a GM TH400 and graft it to yours. That may not be an option, just trying to think outside the box.
Rebuilding an AMC360 isn't cheap, so I would try to find a running one in decent shape. its a direct bolt in from the 304.
77 CJ-7- AMC 360, Edelbrock cam, MC2100, Fenderwells, CJ T18/D20, Chevy D44/EB 9" rear, Trutrac f/r, 4.11, SOA, 1.25 lift shackles, 35x12.50 BFG KM2s, Shackle Reversal