Are you running on dirt/mud or blacktop? If dirt/mud, traction is key, not power, and a stock 5.2 oughtta be more than sufficient. Either way, car durability and heat control are your 2 biggest concerns.

Avoid temptations about rebuilding with new pistons, tight piston clearances for high HP, etc. That’s high-performance advice, and a derby engine is a completely different animal. For a derby engine to survive, you want it LOOSE so that it doesn't seize when you get it hot. The more power you make, the more heat you make. A 318 Mag was rated at 220-230 hp, ~50 hp higher than a 318-4 barrel -- I can’t imagine a derby car needing more than that (traction will be the issue)

SBMs do well in tolerating heat, so a Mag with a roller cam ought to be even a little better (less friction). If you use a Mag, make sure that your water pump and front cover match, Mag’s serpentine system uses a reverse-rotation pump. Remove all your freeze plugs and clean the block out thoroughly to optimize your cooling. Install a new oil pump and timing chain. Get it running well. Install in car.

I have a buddy that has run demo derbies for 20-ish years. He will NEVER run a bigblock - too heavy, too hard to cool, and the extra power isn't beneficial (his opinion). He even prefers a 318 over a 360 because they run cooler and the extra bit of power from a 360 reduces runtime if the cooling system punctures. A good combo is 3.91-4.56 gears with a SG or spool and an engine that will rev quick.

Patrick's cam/spring advice is good too (as always), and for the suggestion for a slower-ramp than his normal recommendation - .