Bone stock LS1/4l60E with 3.73 and a 29" tire. I've never done better than 22.5 MPG highway and that was driving like a grandma, probably with a tail wind
Truck weighs right at 4000 lbs.
400hp and 20mpg can probably be done, but it wont be easy and likely wont be under "normal" driving. I'd still go LS if I were you - just keep your expectations reasonable.