I am considering the purchase of a 1985 E150 with an autmatic and a carb'd 351W (104k miles). Is 8-10 MPG realistically what I can expect?

 

Is it all original and would you leave it that way?

It likely has the 2bbl motor which was a badly smothered gas guzzler, it has a lot of potential for improvement though is you wanted to explore that.

 

I believe it to be all original. I am open to improving it. What might I be able to expect and at what cost? (I would want to try and do work myself. I have a basic level of mechanical ability...done radiators, alternators, starters, etc) .

 

The 2bbl 351w was rated at 150hp and the HO version was 210hp with the only difference being the cam and a 4bbl carb and intake, I have read that the only option in '85 and later was the HO motor but I don't know how accurate that is, definitely something to look for. If the truck has the 4bbl motor it wouldn't need a lot, a complete exhaust overhaul would be a good idea as the cat is long past it's best before date and modern cats just work better. If the truck has the 2bbl motor then it could use more work but it has the exact same potential. This motor is a leftover from the smog era.. low compression(8.3:1 CR) with a really small cam, the heads have rather larger combustion chambers(69cc) and the exhaust was restrictive and just got worse with age as the pellet style cat converters clogged up. There is also a heat riser mechanism(butterfly valve) directly on the pass side manifold collector used to divert exhaust gas up under the intake to warm it at cold starts that would often break or seize up causing a partial or complete blockage of the exhaust on one side of the motor.
Replacing the whole exhaust with anything modern and even including an aftermarket cat will help performance, and replacing the cylinder heads with late model version boosts compression and can also increase airflow depending what castings are used. The single best upgrade for the 2v motor is to swap in a better cam, that with exhaust improvements could add 100hp/75tq over stock, with GT40 heads 150hp over stock. All of these upgrades will improve volumetric efficiency, increase torque output and improve gas milage…. when you're not using the added horsepower, and all of this can be a bolt-on affair. Of course working on the engine in a van isn't as easy as in a pickup so you may not be inclined to go too far if the vehicle runs well as it is.