My personal opinion (you're gonna get a lot of these!) is that you should first sit down and decide exactly where you want to go with this truck, and then head directly towards that goal rather than spending money and time on stop-gap work that will be redone later. That's almost always a losing proposition and can end a project well before completion and/or satisfaction especially if you are working under a light and carefully supervised budget.
If your goal is to do a total restoration for show or occasional parades then go for a rebuild on the engine and tranny, just realize you are talking about 50 year old technology and parts and as someone else alluded to there ain't many around anymore that worked on these back in the day, so you can expect to put a lot of time and effort into tracking down rare driveline parts and having machinists and the like charging a premium to work on something that is in unknown condition using tooling designed for today's metalurgy and close tolerence OEM manufacturing. It's very possible to overbore a block for example and find that the sand core had shifted enough in manufacturing to produce a thin spot in a cylinder wall or find a cracked web rendering all the work done up to that point producing an expensive boat anchor!
If you decide you want a "resto-rod" or dependable daily driver/highway cruiser then go ahead and drop in a late model drivetrain right from the get go. A complete good engine and tranny is probably going to be cheaper than rebuilding the Y and if you find a full donor vehicle at a good price you'll also gain a lot of other useable/salable parts as well. There's a good reason there are many more rods out there than restorations, in the end they are cheaper to build and cheaper and more dependable to operate and can get you on the road quicker! It's your truck, build it the way that is most suited to you.

 

Hey MadFabber, I am a near Purist as well. I am having a struggle with the idea of doing anything to make the steering in my 57 easy enough so my wife could drive it. I really like the "Armstong" Steering, but there is no way she will ever drive it like this. I will make the cab nice and do some cloth recovering for the door panels and Headliner, but overall I like the 18" wheel and the fact that not many people can bring themselves to drive this kind of truck. If I want a nice luxury truck, I have a 1996 F250 that is loaded.

Broomfieldbum