As for the original posters question, 400 rwhp is not by any means ridiculous horsepower for the street. It will be fun, and you have to be mature in the way you use it, but go for it. I don't think gas mileage will be a problem, I'd expect mid to upper teens from it, even with a carb. Its just a 306 you know. Of course, some people only manage to get 8 mpg from a stock 2 bbl 289, which I still don't understand.
On the other hand, unless you frequent the track, its kind of a wasted engine. I see alot of guys at the track with 500hp running mid-upper 12's, other guys with 350-400hp running mid 11's. Your 400rwhp build isn't gonna hook up on the street very well, not to say its not a streetable engine, but if you can't put the power to the ground-then whats the point in making it.