I have a stock/unrestored '69 Z/28 that was built with a 4.10 axle and the close-ratio M-21 4-speed, and 3800 rpm @ 70mph in highway trip driving finally got to me, and I swapped out the 4.10 to a 3.55 (with a new Series 3 Posi unit). I wouldn't do it again, as the 2.20:1 1st gear and 3.55 axle are not a good match in town traffic driving, although 3300 @ 70mph is an improvement on the highway. If you have an M-21 in your LT-1 I wouldn't go any lower than a 3.70.
You'll also need a Series 3 Posi unit, and by the time you're done with the conver$ion, it'll take you forever to recover the cost with the minor fuel savings you'll see.