take a look here since you have a Fox bodied car.
http://www.geocities.com/mainkj/techinfo.html
You can bolt on the cheap and readily available Fox Mustang front end and pretty much anything that bolted to those engines too. That makes your header situation really cheap to fix.
Later generic roller cam engines are dirt cheap and readily available to replace your 302 if you wish. You can get a compression bump with the E6 engines since they have no valve clearance eyebrows and a shallower dish in the piston. Your 78 has low compression pistons with a deep dish and low compression heads. E6SE heads for the higher compression or even the E7TE heads for higher comp and larger valves too. The E7 heads will limit your valve lift a little but that would only be an issue if you were going high hp/tq and not tq/high economy.
With your gears and C4 a compression bump and small valves should be a significant increase in fuel economy if you stick with a small runner intake manifold and in the neighborhood of 500cfm four barrel.