It may be a longshot, but I would have the tranny checked out. Sounds like the clutches could be worn allowing slippage. This would explain the trouble getting uphill.
Otherwise a major tune up would be a good starting point. If those two prove ok, then the compression rings are probably shot and you have no other choice than a rebuild.
If you're after the most bang for your buck, drop in a mildly built smallblock and drive for years and years. When that one dies, plop down another 1200 bucks for a rebuilt long block and keep going.
-magic mike-
