Correct...you need to keep all of the original emissions related items on the engine. The smog test is not only a dyno type tail pipe test but also a visual inspection of the engine, evap system, etc, etc.

Going to a 360 from a 318 wouldn't be an issue most likely, but you would have to keep all of the original smog/emissions related devices the 318 used.

You can upgrade as long as the replacement parts have a C.A.R.B. (CA air resources board) number for them.

That is why most people here don't try and mess with performance upgrades on anything from the late 70's and 80's era. Better off to go with a pre-1975 or something later model that there is easy to get smog legal bolt ons for (exhaust, tuners, etc)

At least our stuff doesn't rust.