Well, if it has had the need to be restored, the value will already go down. The Chevy engine would cause the car to devalue if it were in the $20K range because it's just a beaut of a car. How many miles are on the chassis? Put it like this...there is a restored 87 Vanden Plas with a 350 in it selling for 6K right now! If you're going to spend 6K on the car to restore it, it doesn't sound like you'd make much back!
Restored Vanden Plas with 350

 

Sorry, it's an 86 not an 87

 

keep the original 4.2 engine and fully restore the car, but if your bottom line is to sell after restoring it, you won't get much either way, less still with a non-original engine. Having said that, adding the 4-speed GM tranny will increase reliability and enjoyment for any driver. Most Jaguar buyersdon't want "lumps" (a Jaguar XJ-6 with a V8 engine), but theywelcome the GM tranny. Anybody asking $6k for any lump will realize it soon enough, these cars are selling forless than half that in nice original driver-condition. Don't do it for profit, youmight noteven recover your expensesin full.
Jose

 

Any mechanic will tell you that restoring is for enthusiasts. Selling for a profit means putting as little as possible into the vehicle. You may actually lose money trying to restore and sell it.