Congratulations on your new acquisition. I always thought those cars were cool. A 260-Z is a one year only model, or in between a 240 and a 280.
I have seen a few with a sbc in them. Both stick shift cars. They seem to be a natural with a sbc in them. However, I think it would be killer with an LS in it.
There used to be one in my town with a 327 and T-5. It looked like a nicely setup car.
These cars are getting up there in value, so I don't think you had anything to lose. Good luck and have fun with it.
Yeah, oddly enough despite the 260 being one year only (and technically that year is split into early 1974 and 1974.5 because there were significant midyear changes), and therefore relatively rare... They're not as desirable as a 240.
The 280's are the least valuable, but they're probably the best in many ways. Especially if all the emissions and federally mandated 5 mph crash bumpers are removed from a 280 and replaced with 240 or early 260 bumpers and a few other changes. The bumpers and emissions stuff added a couple hundred pounds and reduced horsepower on the stock 280's despite getting a slightly bigger engine. The 280's are reputed to be made of slightly thicker steel and have structural reinforcements that make them a bit stiffer, especially for high horsepower swaps.