Ok, so put a lot more thought into this and bounced ideas/theory back and forth with my other half last night.
Decided that the coolness factor and extra handling isn't worth all the downfalls I'd have to deal with to keep the vette stuff. So, solid rear axle it is. I'm thinking fourth gen width rear to widen the track width and basically just graft in a whole 4th gen rear suspension, rail/floorpan/gas tank and all. Solves a lot of my issues.
Then keep the c5 front clip and use a regular ls t56 and normal driveshaft.

No matter what my floors/frame rails are all soft and need to go. Whatever isn't soft is so fatigued it's had it. I've already cracked the rear rails twice so they're going. I'm thinking that all this will fit nicely into my budget, and work great. With the added benefits of being able to find replacement parts pretty much anywhere should anything fail. That's why I'm looking at grafting in factory stuff over any of the aftermarket bolt in kits for a first gen.

Plus by keeping the car a solid rear I can still have a prayer of putting down the power from the turbo'd 6.0 I'm putting in :)

nice! atleast you made a desicion...now dooo it!

Soon. As soon as the car sitting in the bay makes it's way into the booth mine should be heading in :)

whats in the booth now?

Nothing useful. Some early 2000's Chrysler Sebring. Light nose hit my landlords working on. He told me once it's out we can get mine in there and get rolling on it. Talked to him more yesterday, hopefully next week. He wants my fuel system out. Traded him the whole aeromotive set up and some cash for the white truck I got ;). I decided I want a regular tank and probably dual walboros or a big Bosch in tank pump.