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I presume you're talking 12 mpg WITHOUT the trailer attached!

I have a 1990 1500 2WD with a smog-legal 383 that produces 250 pounds of torque at the rear wheels on the chassis dyno. I think this is comparable to your 454.

And it gets 16 mpg highway when not towing, with K & N air filter, Edelbrock TBI intake and headers, 3.73 Posi and a Crane RV cam.

I just remembered, your 454 only came with a 3-speed automatic, no overdrive like the small-blocks. The 700R4s are not as strong, perhaps a Gear Vendors overdrive behind your trans might be the best way to go.

I prefer the '73-'91 body for its greater front seat room (no airbags in dash) and larger cargo area.