I would save up and find even a 305 personally, but that being said, a friend of mine a few years ago was trying to do the same thing with his 267 bu while in college so funds were not really available. A few of us donated parts and helped him put something together. We came up with a stock 267 bottom end with a 327- 300hp cam (.390/.410lift), a set of 416 casting 305 heads from a mid 80's h.o 305 with 1.84/1.5 valves and did very mild port work, basically gasket matched the intake side and cleaned up and matched the exhaust ports, a performer intake (also gasket matched) a 600 holley vac secondary, jetted down a bit, and headers.
Started out with a recurved stock hei and an accel super coil and added an msd box later.
We took the stock 2.29 gears out and put in a set of 3.73's from a junk yard s10 diff with a gov-bomb carrier. It worked quite well and was fairly quick, for what it was.
It worked even better with the 1800-2200 stall $99 converter we added later. Then we swapped to 4.56 gears. Was lots of fun around town but definately not a hiway car anymore.
If you can get your hands on donated parts, I say why not see what you can do?
But i wouldnt waste money on it otherwise.
As for your 305 cam, it depends which one it is, its most likely not much of an upgrade if any.