Waste of time to use a 700R4.It should have never been put in a truck with an engine bigger than a 4.3. It"s not robust in the least. A 305 Chevy can rip it apart it in no time flat, forget a 350 or 4bt.
I would personally look for a NV4500 or an automatic transmission with OD and lockup. A 4l80e can be used and would be strong enough in stock form for a 4bt. You"d have to do more research, but I believe some bread trucks used the combination. Parts are available otherwise, but are expensive. 92 and 93 6.2 and 6.5 non-electronic trucks had a standalone controller when paired with the 4L80E, which is alot cheaper than buying a $1000 stand alone controller.
Even worse is that b&d is saying that a 700R4 with a FEW upgrades would handle it. A 700R4 with every upgrade available would likely handle the 4bt. Just keep in mind that half the battle is getting the combination hooked up and working. A fully built 700R4/4L60e is as strong as a stock 4L80E. Atleast if the 4L80E fails, you can upgrade it when you rebuild it. Also, it tends to be expensive to have a 700R4 fully built.
I really fail to see how a $40000 truck that is worth 5,000 in 10 years is cheaper than a truck that he might have 5000-7000 in. The direct inject gasser MIGHT get the same mileage, though it"s not likely. The diesel will easily get 25mpg at 55-60mph. The best the gas will get is maybe 22-25mpg. The biggest factor for me would be that the parts for these older trucks are dirt cheap. Look at the prices on RockAuto for a new chevy and an 88-98. They"re also realtively easy to work on.
One thing that really concerns me are the newer frames. How the heck do they plan to keep the salt, dirt and moisture out. Those frames are going to be gone in 15 years at best. Truck is going to be downright dangerous.
Diesel is actually cheaper right now. Normally it"s a few cents more for a fuel that yields you 30% better mileage. Still makes sense to use it if you don"t need to pay a $12,000 premium for it.