1991 Camaro RS engine build ideas?

I have a 1991 Camaro RS that has a non stock motor, a 400ci small block 6.6L, as far as I know, its mostly stock and is only pushing 260hp and 410lbs of torque. Those are verified dyno crank numbers. Now I want to build this engine up, my ultimate goal is 500hp/500tq to the rear wheels, now I know my tranny will have to be upgraded and also need a stronger rear end but this post is purely regarding the engine itself.
Now my main question is, should I build up this 400sbc or switch to a 5.7L ls1 or a 454 Big Block. I'm on a budget as i'm 18 years old and also have another car that I pay $350 a month for (2017 Ford Focus ST) so I'm curious as to what can get me to 500/500 cheap but reliable in the short term.

Added (1). engine was fully rebuilt 2 years ago and has around 8000 miles on it since the rebuild.

Hi so time to face facts here back in 1991 yes this engine did have 260bhp output power. However over the preceding years most of this raw power has disappeared due in 99% to engine wear. So now it could not to con a phrase pull the skin off a rice pudding. Due to loss of metal off the bearing surfaces. This is how engineering wear effects machines from cars to timepieces such as clocks. The bearings are made bigger and become sloppy and in the case of engines they do not perform like they used to. So the best way to put back the power is an engine re-build to recondition it =. Bored out cylinders and new pistons with new pistons rings. Reground crankshaft and replaced mainsheet bearings along with new camshaft bearings. It has become rather floppy.

Older engines were not designed to make massive power.
Lots of changes need to the engine are needed. Reliability will be down.
You need to strengthen the body and fit much bigger brakes as well.

I would say that for the money you should buy one of the re-manufactured big blocks. I have seen some advertised at around $3500 and that comes with a warranty. I really think it will be better in the long run and will make more power at any RPM than a small block.

Being on a budget kinda restricts what you can do but there are some options. You can build a stroker 383 or 400/406 to get close to 500/500 for around 5K… See articles below. The 406 setup would be a better choice for better torque figures. A crate LS3 will get you roughly 525/480 but costs double that with the ECM/controller package… Around 10K. The LS3 might be a better choice for fuel economy, reliability and less tuning or more control over tuning although you'll be somewhat restricted in trans options. Or you can still install an FI kit on an older motor if desired. Do you want a computer controlled trans or OD or not? A basic TH 400 or 4L65 /4L80 would mate up to an older block setup and even some modern TH350's can handle that much power if built right. Just depends if you want OD or not and /or computer control of trans shift points, etc. Which may affect your engine choices.

Going the big block route is another option and will likely cost around the same to build or slightly higher but also adds more weight to the front end unless you opt for expensive aluminum heads and you'd need custom BBC mounts, etc… So a big block choice would require front spring upgrades, larger rad, engine bay fitting issues/restrictions, etc. I had a buddy back in the 80's that built an LS7 454… 12:1 comp, open chamber heads, cross drilled crank, ported, polished, blueprinted, etc. For his 70 Chevelle that was just plain scary to drive… Close to 600 hp and many modern crate packages or builds are close to that.

I'd say the best route to keep costs down is stick with the engine/block you have and build on that as long as it checks out alright and has 4 bolt mains, etc… Pick the right combo's of heads, cam, intake, carb, headers, etc. To get the figures you're targeting.

http://www.hotrod.com/articles/hrdp-0609-500hp-small-block-chevy-build/
http://www.superchevy.com/how-to/93863-500-horsepower-engines/

http://www.superchevy.com/how-to/transmission/1109chp-picking-the-right-automatic-transmission/

Factory wise, there never was a 400 CI engine installed in a Camaro. I suspect that someone had a Firebird that they totalled and installed the 400 CI engine into this 3rd gen Camaro. The best thing to do for HP is not to rebuild the 400 because it has cylinders with thin walls and for cooling, GM drilled 2 holes between each pair of adjacent cylinder for the same reason. No one in their right mind would rebuild a 400. You would be better off getting a used 350, bore it .060 over stock and stroke it with a 427 crank. There are kits out there to do this. You won't get 500 HP but naturally aspirated, you will come very close.

I would go with a LS engine.

Get a 350 block and use a 400 crank, that should give you 383 cubic inches, You'll need good heads and a 750 carb. I have this set up and had the engine dyno'd at 481 horsepower and 460 pounds of torque.