Don't worry about it... a 3.9 is nearly as gutless as a 3.5, insurance difference will be marginal.
I had no problems with insurance and a 4.0 litre V8 when I as 20.
If you have the money, there are plenty of turnkey kits out there.
The Chevy engine was practically made for the land rover, they are perfectly suited to each other.
Mine did this when the output bearing in the transfer case started failing.
Symptoms were clicking and whirring and if you grabbed the propshaft you could move it up and down
I've got a 1983 110 V8 and it does indeed share quite a bit with the series 3.
Fuel filler neck is series style, doors are series style, front chassis outriggers are series style
There are other things but I can't remember them.
In the last week to get my sisters little 90 ready for it's MOT I have...
Fitted two new angel eye headlights
Replaced rear square fog and reverse lights with more modern round style
Fitted new side repeater
Fitted new sidelights and indicators
Painted and fitted new front wing
Painted and...