305 burning oil / oil smell

The engine in my '91 has reach the point where it burns roughly a quart of oil per 1k miles. I wouldn't mind that so much, but the aircon picks up the fumes rather well when stopped, making this a bit of a safety concern (besides the smell inside the car).

Any ideas on the best way to address?

Will new seals fix this, or am i looking at having the whole block rebuilt?
Is it even worth it, or would i be easier / cheaper to stick in a used 350 and not worry about it?

I'm up to almost 250k miles on this engine and I am pretty certain the pistons and associated part have never been touched.

First I would try to find the leak. It is obviously leaking on the exhaust pipe/manifold. Check that your PVC system is working. You could just have a few loose bolts in the pan, or valve covers.

If you plan on fixing the engine, it is about the same cost to buy a low mileage used 350. If you choose to go that way, get the computer for the 350. The best 350 to get is one from a 93 9C1. It is rated at 205 HP. Get the Y pipe for it as well, or install duals (modify the trans crossmember).

If you are going to replace the engine, make sure you put a new oil pump and rear seal in it, at a minimum.

It is easiest to pull the trans and engine as a unit, and swap the trans outside of the car. Put a sealed cover over the rear of the trans, or the fluid will be all over the ground. Leave it there until you have reinstalled the unit.

By "burns" do you mean there's blue smoke coming out of the tailpipe?

It is not uncommon for an old V8 to allow excess oil past the exhaust valve seals, which then vapourizes in the exhaust system. This is a relatively simple fix -- remove the rocker covers and plugs, hold the valves up with compressed air, remove the rockers, release the collets, replace the seals and reassemble. Allow most of a day if you have never done it before. Special tools are a valve spring compressor, an adapter to apply air pressure through the spark plug hole, and a sleeve to protect the new seals as they pass over the stems. And a magnetic pick-up tool for when (not if) you drop a collet.

Less common, but also possible are worn intake valve seals. They are not subjected to as much heat so they don't harden as bad. If they leak, then the oil actually is burnt, since it is sucked into the intake flow. Typically this will foul plugs or at least cause a significant increase in engine knock compensation.

Least common is excessive oil left by the oil control ring(s). Broken or stuck rings, worn cylinders or excessive big end bearing clearances are the most common causes. Can be fixed, but like Fred said, cheaper and easier to just fit a good used engine.

@Fred - The block is pretty dirty / grimmey, so that is a possibility - I know there is one spot on the front of the block where the valley gasket has deteriorated and it is leaking oil - so something like the
FEL-PRO Part # KS2656 [You must be registered and logged in to see this link.] might work and fix most of the issues?

The valley gasket at the front of the block is only silicone. If you pull the manifold, you have to replace the gaskets and re-silicone the ends. The kit will have a small tube of silicone, but you need a little more than what they give you.

You can wash the engine (except for the distributor) at a car wash...I put degreaser on the engine, and drive it to the car wash. I use the low pressure rinse to minimize any damage from too high of a pressure. It will get 95% of the gunk off of the engine, and you will be able to see any leaks.