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I figured it was the 4.11 gears with the SM420 originally paired with a 327 V8 then converted to a smaller 250 causing the low top end speed, I might get the 350 and rebuild it in my spare time just for the experience, plus I'll have a spare engine (if I can get the highway speeds out of the 250 there will be no point in replacing it).
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Just curious, how did you determine it was a 327 originally?
Does the VIN start with CS, CE, or CT?
Or is it a C2### ... (C 2 number, number, number?)
I find two different sites for VIN decoding for 1966.
The 250, according to what I can find, was the "new" engine for 1966.
Unless you have an overdrive transmission, top gear is usually 1:1. At which point engine RPMs determine the top speed (when deciding between engines with the same transmission/axles).
From my motors manual the 250 horsepower is 150 at 4200 while the 327 horsepower is 185 at 4400 rpm. So both motors pull their "best" horsepower pretty close to the same place, rpm wise. So at "peak" the 327 might move the truck a little faster, but the 250 will still get close. Running empty you shouldn't see any difference at all.
Basically speaking the 250 will move the truck at highway speeds.
The advantage to the 250 in a truck over the 327 is the 250 develops its torque (235) at 1600 RPMs while the 327 (305) at 2000 rpm, meaning that the 250 develops its torque lower, getting a load moving and up to speed "faster" than the 327 will.
That is with all things (engine condition) being equal/new.
I went looking for the rear axle combinations available for 1966, but the manuals I have are a bit lacking for Chevrolet. The Motors Manual doesn't list, that I could see, the ratios available per year/motor.
*If* your rear end is 4.11:1, then both engines will move it at lower speeds than if it were 3.08:1