'84 Shortbed, 305 c.i. knockin

[_uglyduckling_]

I recently purchased a beautiful 84 truck with 62,XXX original miles. So I was driving it on the freeway and I noticed the engine shut off. I pulled over and turned it on, Saw the gauges at normal. And started it again and took off. Shut off when I hit the break. So I dont see smoke, I squeeze the bottom hose to see if thermo stat is working and seems good. Driving and it shuts off again. While i get back on the freeway it stays on and long story short the engine started knockin. I hate my life but not my truck and I still owe 5 grand on it. I bought it as-is. So im biting the bullet because this truck already has what i wanted to do to my salvage truck i bought and now sold. So I was thinkin about switching to o/d tranny, and dont know if i should buy a rebuilt swap my core from o'reilly, or go to the chevy dealership and buy a 454. Im kinda looking for a cheap way to get my engine running. Mechanic said 2 grand will take car of parts and labor if he bought it from o'reilly. And i know later in life im gonna want more power. So what should I do. Any info on what tranny with o/d i should get, size of drive shaft, and what should i do about the motor. Need some critical advice.