I can not speak with any authority on whether you will have adequate clearance or not, but if you cannot get the LT1 in and working after 2 years what makes you think dropping the crate 350 in will be easier?
Are the problems fuel/electrical related or fitment?
At a recent car show here a guy had a beautiful Ford Falcon with an SEFI V-8 in it and there’s half a dozen Pintos and S-10s running at the drag strip here on a regular basis that are V-8 equipped; some with FI and some carbed with tunnel rams.
One of those S10s is running a beefed up 454 even.