Do you already have the borgeson box?
The engine going anywhere for work is going to cost money. What does a Leakdown test show? Where's the air leak? I'd do the absolute minimum to get running like it sits. Get to driving and having fun.
I'm not voting you go with a Hemi, but fyi, Hemi swaps can be cheap. 300 rwhp with log manifolds and a bone stock early 5.7 (with manual steering). Or 400 rwhp with a bit of work and headers. If you already have the borgeson box, then buy the TTI's and get out your hammer. Fits on my car. I highly recommend putting the motor in from below. My second piece of advice for those reading- if the headers don't fit with the TTI mounts, modify the mounts to fit the headers. Emil did that and has pretty headers. I did not and I do not.
I'm mostly going to Borgeson for the lighter weight and faster steering ratio. My box is most likely due for a rebuild anyways.
The compression test was done when the engine was bought. As for where the source of the problem is. It's unknown. IIRC the main seal was leaking before he took it out.
Yeah, these threads were a bad idea. I'm all over the place now. Depending on the condition of the block, I'm at the point where I'll either just sell the top end and go to aluminum components or just run it as is.
