Terrific looking car.
I don't know that I would rush to any decision re the motor. However....when the time comes.... I would either do a nice 2056 with factory FI or a nice 3,0 Porsche six motor.
Now if that didn't work for you, you may want to consider a Subaru conversion. That is a terrific swap and the parts are cheap and the R&D has been done to perfection. I just think the V-8, though great motors for sure, change the entire nature of the car to much.
Just my thoughts. Best wishes and I think it is great you got your grandfather's car.