Given the choice between the 304 and the 360, you're better off going with the 360 if you want Jeep power in your Jeep. But nothing really 'drops in', or 'bolts up', without some modification/fabrication.
Does your dad's YJ have the I4 or I6? If he's got the 2.5L swap in a 4.0L. If he's got the 4.2L, and just looking for some more 'oomph', I'd consider building it up. Stoker, 4.0L head, EFI. Both options are closer to 'bolt up' and 'drop in', then transplanting a 'bastard' motor.
If your dad's just gotta have a V8:
I'd suggest a 302/5.0L HO or 351W/5.8L.
In my area of the country you can pickup SBF engines all day, every day for a reasonable price. Hell there's a guy on one of the local boards that has a 351W crate motor for sale (with 8 hours of run time) for...$800!
http://www.greatlakes4x4.com/showthread.php?t=60684 You'll pay hell finding a decent 350/5.7L for that price, as most of the junk I've seen is way over priced. Believe me, I'm looking for a SBC to drop into my 89 R30 flatbed. But hey, maybe you'll get lucky.
Get a wrecked F-250 or F-350 and strip out the entire drivetrain. Heck you can even use the axles (solid front, not TTB), on your YJ. If he wants to run EFI, there are few systems simpler to adapt than the EEC-IV.
Problem with the SBF is that there is limited support in the aftermarket for the swap. But it can be done:
You can build a powerful SBF for the same amount of money you can build a SBC. IMO, it's no 'cheaper' to go SBC.