Use the 256, if the only other mods you have done, or are planning to do, are the ones you have listed. It's well and widely known to be a good match to that situation. No "adjustments' necessary other than advancing the timing. (which is necessary ANYWAY even with the stock cam... the factory's settings serve MANY masters, including emissions, gas mileage, emissions, all-altitude function, emissions, compatibility with cat-**** gasoline, emissions, ... and oh by the way, did I forget to mention emissions? that was the factory's BIGGEST priority back in the day, FAR ahead of anything resembling or otherwise related to "performance") Just do it.

The \strongest weaknesses keeping your car slow are the torque converter (1600ish RPM) and the gears (2.73). If you were to put 3.42s and a 2500 or so stall converter in it, a GOOD one not a cheeeeeeeepie, you might be AMAZED at how things other than the engine can cripple a car.

I'd also recommend a dual-snorkel (L69) air cleaner. Probably good for 5 HP easy over an open element.

And, another SURPRISING YUUUUUUUUUUJJJJJJJJJE power sucker: that clutch fan. Put an electric one, and a higher-output alternator, on it. There's another 12 - 15 HP right there.

There ya go: 20 HP without cracking the motor or draining any fluids. What's not to like about THAT?

The 256 shouldn't upset the CCC. While you're in there, replace the valve stem seals, valve springs & retainers and a nice new set of standard rockers. You dont have to go with anything particularly special, a set of Z28 ebay springs will be better than the 30+ year old fatigued rubbish thats in there now.

I've got a 268H in my lg4 - non computer controlled and can definitely concur with Sofa that a 2200+ stall converter is a worthwhile investment.

A quick look I found summit the cheapest for the K12-234-2 kit. Also free shipping.