Skip option 2, that will be more of a pita than what it will be worth imo. Do you really want the LS1? Personally, I'd be happy to see that money pit disappear.
And don't give John Q Public too much credit, there is an excellent chance of finding someone to cough up $30+k for this - cars are going for stupid money, at least around here. The LS1 will be a fabulous selling point to one of those types.
It would b see nice to see it go to someone that would run it.
That's the thing. Even if I sell the car for a good dollar I cannot replace the majority of parts in the wagon thanks to the state of things today. But, I can repurpose them and have two great cars instead of three mediocre ones. I am making a business decision here... this is all about ROI.