I would suggest staying with the doghouse fan shroud, and mildly porting the stock dual-port heads. You are limited to the stock valve sizes unless you increase the exhaust to 1 5/8" diameter (that would mean getting rid of the heater boxes unless you buy the 1 5/8" diameter heater boxes from Gene Berg). Larger exhaust is for higher hp at higher rpm's, though, and I assume you don't need that.
I suggest using a 78mm c/w crank, and "thick-wall" 88mm pistons and cylinders. Some people will suggest 90.5 p and c's, but tests have shown that they will soon warp in the heat of a bus engine compartment. There are also "slip-in" 88's available (they do not require machining of the heads), but don't get them as they will soon warp due to the heat. Thick-wall 88's are the best for a bus.
For a cam I'd suggest a stock cam with 1.25 rocker arms, or for a bit more fun an Engle 100 - equivalent or at the very most an Engle 110 - equivalent cam (274 duration, .431 total lift with stock 1.1 rocker arms). Anything with more duration than that will hurt your low-rpm torque.
So... is it gonna be a babe magnet?