Tatao, I don't know when they stopped installing inline engines in the big Chevies, in this country, but the last one I worked on was a '64 Biscaine. I doubt if you'll ever get 20 miles to a gallon on your car, but it certainly should do better than 10 mpg. It should also climb any hill you can encounter.
You'll have to have some tools, or know someone with them to do these tests:
I'd have a compression test and a cylinder leak-down done; that should indicate the condition of your rings, valves and even head gasket. If that shows a problem with the rings, valves or head gasket, you will have to repair, or replace them before you go any farther.
If the tests above shows those items are good, Check the ignition timing, vacuum advance, spark plugs, fuel and air filters, look for vacuum leaks.
I also had a vehicle that had a clogged muffler, one time. The baffles inside had come loose and was restricting the exhaust flow. It got terrible mileage, had no power, but started and idled just fine. It's a long-shot, but something to check.
Good luck!
