Welcome to the forum.
The ONLY WAY I Know of to get 20 mpg in that truck would be to pull the engine/tranny and replace with four or six cylinder diesel.
I do know it's possible but it IS expensive, which you know. I'm not sure i would go with a 7.3L diesel. Consider a four cylinder Isuzu engine, mated to an Isuzu tranny. YOU MIGHT get one of those purchased and installed for your $5k budget?
But this will be a tough one.
I owned a 1991 GMC Suburban, 350 V8, 4x4. After a lot of low cost mods, I got 18 mpg on the highway. But that was cruise control, long distance driving. Around town it was closer to 15mpg.
Big trucks just don't lend themselves to economical driving (at lease not yet).
again, welcome to the forum and good luck with whatever project you end up with