Now you are a man with a plan, my friend. I always think that as well. If my engine ever goes, it's just the perfect excuse to put a better one in. I haven't settled on it myself, but I may just go up to a nicely tuned Chevy 350. That'll have more than enough horses for me.
My grandpa's Fleetwood was a 4100. I was only a kid, but i remember my father hated that engine with a passion. He seems to recall it as being a pluckier motor than my 307, possibly because it was a lighter vehicle.
If I were you, I'd try and fix that solenoid though. It would suck to lose the race because of a poor shift. Most GM trannies are the same, it was real easy to replace on mine, if the solenoid is indeed the problem.
I dunno, what do you think? Do you feel the power when you put it to the floor? There IS power there...there's just more car than it can move....