Engine Rebuild

[rppngears]

I am getting ready to rebuild the engine in my 91 mustang 5.0. Unfortunately, I was not ready to do this, I would like to have saved up enough so I could do everything I wanted to do, at the same time. But, my headgasket is going bad caused by my engine overheating when my water pump went. So I have about $1000 to spend for the parts. I was thinking of going with a rebuild kit from summit. $250 for hypauetektic pistons and $450 for the forged. Which, if either is the way to go? I don't need to desimate everything but I would like to be around 300 - 320 horses by the time I'm done.
Also, what other recomendations do you guys have for the other $500 - $750. I eventually would like a set of trick flow heads and a trick flow intake, but that won't be till next summer. Should I wait until then to go with a cam or do it while I'm rebuilding the engine. I was also considering having it bored to a 306, what are the thoughts on that?
For some background info, my car is a daily driver and must pass emissions. As of right now I have a k&N in fender air intake, dynomax cat back exhaust and timing advancement. I usually keep my engine under 5000 RPMs and I plan to keep this car for awhile, so I would like the engine to be built to last.