I think this subject could use a little bit different approach. I've noticed a lot of people saying to go ahead and put the 351 in the car. Well I think maybe you should consider keeping the 289.
Think about it for a sec....they build Racing 289 engines for vintage racing that see 8,000 rpms and make 500 horsepower reliably without super exotic components! Of course they pay for the labor and r&d! But see.....
http://www.cobraautomotive.com/
for reference. The potential for power in a 289 is only limited to your budget. And if you hop up your 289 engine this time, and decide later that you want more power, you can bolt on some more parts. And by keeping the 289, you don't have to spend any more money on swap components that aren't going to do a darn thing for horsepower!
Get some good advice from a race engine builder, and tell him about your horsepower goals, budget, and future plans. All you need to do is select the right components, then you can easily meet your budget and power levels. You can always spend more money and bolt on some more parts later.
Maybe now you can opt to spend a good portion of your budget on a beefed up short block--with a good stroker kit, cam, and intake. A 289 can be stroked like a 302 to 347 cubes, and the max over bore depending on your cooling system and block strength upgrades is 0.060" for a total of 352 cubes! Can you say lightweight Windsor without the weight and size/swap problems! Forget the Windsor! Then you can spend the rest of your money on the top half of the engine. Later on you can bolt on some more exotic parts like alumminum heads, or have some port and polish work done, or put a roller cam and roller rockers in, or do an ignition upgrade....whatever.
A solid stroked 289 will get you close to your power goals alone, and the rest is up to the head and cam choices you make, and the machinework and builder choices. That is what engine builders get paid for!
I had the original 289 rebuilt awhile ago. I had the stock heads freshened, 0.040" forged aluminum pistons installed, a performance cam and kit installed, a Holley 600 cfm carb upgrade and rebulid, a Mallory Distributor (not reccomended--try MSD instead), a Cobra Hi-Rise intake, and a full custom exhaust. After awhile I wasn't that impressed with the power, and later on I screwed up some pistons and valves when I over revved it.
I took my engine to a reputable race engine shop, and have been going pretty crazy for power ever since. You would be amazed at what experience can do to guide you! My budget is a bit larger than yours, but I think you can reach your goal with your budget. Just let them know exactly what you want, any builder worth a darns should be able to give you the skinny!
Here is my plan for example...
It's getting a SCAT Stroker kit--4340 Forged Crank, 302 Main, 3.400" Stroke, 5.400" Forged H Beam Rods and 4.060" Bore Forged JE/SRP Pistons. The forged Scat 4340 crank, and forged H-beam rods will make the 289 a 347 Stroker, and the 0.060 JE/SRP pistons should make for about 352 CI total. I am also installing Total Seal Rings, a full Lunati Roller camshaft conversion (but they are going to custom grind a cam for me for max power), Crane 1.73 Roller Rockers, Trick Flow Twisted Wedge Heads (ported and polished the heads to match the cam and intake), a Cobra Hi-rise intake (ported and polished to match the heads and cam), a Canton 7 qt. road race pan and windage tray, custom full length headers, a Barry Grant carb, a MSD Billet Distributor, a MSD Digital 6 Ignition (and possibly a MSD Multi-Function Ignition Controller for a complete custom curve), MSD Superconductor wires, a Billet steel flywheel, a Lakewood scattershiled, a Centerforce Dual Friction clutch, an Edelbrock aluminum water pump, March pulleys, and a bunch of machine work for strength. Oh, and everything is ARP!
I'm expecting 350 horsepower easy, and possibly over the 450 mark. But I could have been a lot more conservative with my component choices. I'm also planning to put in a pretty hefty nitrous system.
Just get the best components you can afford for the short block, and add the rest later when you get more $$$. I'm a poor college kid...I know...and I'm serious about spending money and making horsepower. Don't be afraid to wait out the project for more $$$ to get it just right...you know, get exactly what you want! And don't sweat the engine swap.....a good manual, some tools, and a rented engine hoist will do the trick!