I can go with what beeterolds said above. If you can believe it, a 350 will get better mileage than a 305 in our cars - IF DRIVEN RESPONSIBLY!!
I can get just better than you with my '80 Cutlass when it has a gas 350 olds/2004R combo in it. Of course, the diesel is MUCH better...
Anyway, I would get a 330 or 350 Olds if I were you. You need around 9.5 to 1 up to 10 to 1 compression ratio for the best mileage in an Olds small block. Then, you need to tune your computer Quadrajet with some aftermarket tuning software and your laptop to get the full effect. If you're not computer saavy, start with a standard 350 Olds Quadrajet or even a Carter AFB/Edelbrock carb. I was running a 625 cfm on my 350 and getting 22-23 mpg with my 2004R installed. I think tuning is the best way, though.
I have converted Olds V8's to both multi port and throttle body fuel injection. Either way, you still have to tune it because the factory defaults are all set for Chevy, and you don't want to run the Olds FI computer from the Cadillac's that they were introduced in from the 70's/80's. If you want to go multiport, you can use the intake from a Cadillac Seville from 76-80. It was a factory multiport intake for a 350 Olds engine. You then will need a TPI wiring harness and computer from an 87-92 Camaro or Firebird. You tune from there. If you want TBI, you need the entire setup from a 5.7 TBI engine, preferably from a pickup truck. You sell the 350 chevy to someone who wants it and use all the rest, except the distributor, on your 350. You need your 307 computer controlled distributor to run it properly, or you can use an older big cap HEI and remove the vacuum advance stuff.
If you put TBI or multiport on your 307, you will have invested in a big hassle that doesn't give you the mileage you're looking for. The engine isn't big enough to give you that low end muscle which is needed when you are towing such a big rig.
There is one last myth; higher rear end ratios (numerically lower) do not give you better gas mileage in the real world. They help the car beat the mileage numbers game at SPECIFIC RPMS AT SPECIFIC SPEEDS AS TESTED BY THE GOVERNMENT. These numbers do not apply to what you are doing. I GUARANTEE that if you have 2.anything rear gear ratio your 307 will do better on gas with 3.23 or 3.42 rear gears. Again, this is because your engine is working very hard to move your car and the easier it can move it in the beginning, the less gas it will use - to a point. Anything beyond 3.42 will wreck your mileage.
If you are absolutely bent on your 307, you need:
-Headers with a true dual or single 3" exhaust system. Free flowing cat if you have to run one.
-You need cylinder heads from 1964-1970. You can use them from either a 330 or 350. These heads have small chambers so your compression ratio will be the same or better than you have. The larger intake and exhaust ports will help the engine breathe more efficiently. Your heads are the worst ever produced for an Olds engine. Ditto the intake...
-Intake manifold. You need an aluminum performer style intake to match the above heads.
-Camshaft. You should have a factory roller block. That's great that you have a roller cam, but not so great because they cost real money. Call Mondello or Lunati to get the most tame street grind roller cam they sell. It will still be better than what you have and not overpowering to kill mileage. If you are non-roller, you again want a 1964-1970 small block cam, stock grind. 330 or 350 engine is fine.
-Tuning!!!!!! To wring the last drop of gas from your carburetor you must tune the ECM to your new combo. Go to thirdgen.org and browse the carburetor section because all of their carb cars came with computer control. If you feel the need to post questions there tell them that you have a 1986 Firebird with a 305, big cap HEI and a quadrajet. Also browse the DIY PROM section.
Good luck!
