You'd have to bore the living snot out of of a 305 to make it a 355... I don't even know if it's possible? I don't see why anyone would bother to try when they could just buy a 350 block to begin with.
Sleeves are just steel cylinders... That have an inner diameter to match the pistons you're using, and they bore out of the block to fit the outer diameter of the sleeve, and then press the sleeve into the block. Sometimes they're like epoxied into place to keep them from coming loose, others are just pressed friction fit. Lots of small engines have sleeves, dirt bikes, chainsaws, lawn mowers, out boards, motorcycles, etc. It's usually used when the jug (cylinder) is made of aluminum. Since aluminum is relatively soft it won't hold up to the wear of a piston going up and down, so they line aluminum cylinders with steel for better wear resistance and I think it reduces friction.
High performance two strokes now often don't have sleeves, anymore they have "Nikasil"
http://en.wikipedia.org/wiki/Nikasil plated cylinders. It's lighter, conducts/transfers/dissipates heat more efficiently, and is typically considered to have lower friction than steel, and longer service life. But it's fragile, and if it's not done perfectly it can peel or flake... And it costs like 250 bucks to have a cylinder re-plated as opposed to a 25 dollar honing, or 45 dollar next oversize bore job.
And like redsx2434 said, almost all large diesel engines have sleeves... they're not tight press fit (I mean they're relatively tight, but they can be removed in the chassis of the truck most of the time). They're held in by mechanical means (bolts, clamping pressure, etc.) This is so when you've bored your stock sleeves to the limit, you can put new ones in and start from a fresh standard bore. This theoretically makes the life of the engine nearly indefinite, not that it matters as most heavy diesels get replaced with more efficient or powerful designs before their useful life is used up. Or the rest of the truck around the engine rots away or gets destroyed. There's lots of semi trucks running around with a million miles on them and up.