It really depends on your budget, which sounds low, not knocking, just saying. The following assumes it is not installed and running it is not easy. I am also writing this from the standpoint of a minimum budget build, the most bang for the buck. Keep in mind, the go fast, have fun part is easy, the difficult goal cited is "Run Dry".
For starters, unless you know the history of the present build I revert to the history lessons I try to pass on whenever possible. A sure fire way of blowing up a rotating assembly is to slap a new set of heads on a worn out block, I have seen this happen so many times and the oil spill makes a hell of a mess. The first step is to try and determine the status of the present rotating assembly. Before doing anything, do a leak down test on the motor, you are looking for very consistent readings on all 8 cylinders. If you have any low cylinders, you need to determine if it is a ring or head issue. If leakage on the heads then fine (but that is an indication of some time on the motor), you are looking for any indications of issues with the block and rotating group.
Next, pull the heads, leaving the short block intact and mic the bores. Take it to a machine shop if needed for inspection. Are the bores round and consistent or worn, egg shaped and/or vary significantly over the stroke. Check the timing chain, is that good or worn out? A sloppy timing chain indicates a lot of time on the motor.
Assume the short block checks out, you now have something that is probably good up to maybe 5,000 RPM max (but probably better limited to 4,600), 9 or 10:1 compression and has potential to around 400 Hp. 9:1 is probably best on a used block, 10:1 being reserved for a short block rebuild. An RV cam is a good cam for this RPM range, if you can confirm what you have (pull timing cover and get P/N) you can confirm the specs.
Note that you mention a 2.38 gear box, let's call it 2,100 Prop RPM at 4,800 RPM. How big of a prop can you put on the boat? If you want to run dry, you should be thinking wide, 2 blade prop, probably about 78-80". There is more to be gained for the money in the prop than in the motor for sure.
What pistons are in it? Pull pan and look at underside, I'm pretty sure they are aftermarket. Are they dished, flat or doomed? Dished is good, flat probably works, doomed is a different story.
You can put money into aluminum heads if you want, but with no other changes, they are not going to add much power, the primary value is the weight savings. This is a cheapo build, the primary goal is building compression ratio (but don't forget my original advise, more pressure on worn bearings is a future blown motor). There are several head options, but the way to do it these days is a set of Vortec heads, they are smaller chamber and you gain the Vortec flow characteristics ideal for the RPM range. Another advantage is the knock resistance, the vortecs tolerate a bit of added compression ratio, 9:1 would need mid grade at most, premium gives more timing advance. $400 for a set of rebuilt Vortec heads and $300-$400 for an Edelbrock intake to match your carb and add the gaskets is about it, depending on the pistons presently installed. Drilling the steam holes just takes a drill press, but a machine shop can do for reasonable. My son actually has a set of used vortec heads with roller lifters and Edelbrock spread bore intake for sale, PM if interested.
So that's the low budget plan (other than the real low budget plan of just install). If you want more than 400 Hp, break out the wallet and build a 6,000+ RPM motor. I like the HotRod website as a good first cut on what is involved, but agree with Swamp about a reputable builder. But no way do you want to plan to turn an unknown rotating group beyond 5K, in particular an antique motor like the 400, those things are rare and have so much potential!
Here is the $7K+ do it yourself 6K RPM build, price goes up from here:
https://www.hotrod.com/articles/ccrp-1112-406ci-small-block-chevy/
