If you don't think you can pick up an LS1 for less than $8k you should go take a look in the for sale section over on ls1tech.

Here's one for $5500 and you could probably still talk the guy down.
http://www.ls1tech.com/forums/showthread.php?t=587079

Here's another for $7500.
http://www.ls1tech.com/forums/showthread.php?t=589349

You could buy something similar to these cars for pretty cheap and still keep your 240.

Just a little food for thought.