Have done it both ways, with and w/o trany. For safety sake, I would bolt the chain to portions of the block so it doesn't slip. Also, if you can rent a leveler so you can tilt the engine-trany, it will be most helpful, especially if this is a one man job like mine usually are. When trany is out, replace the front seal on the trany and your job really will be complete. Take off your oil pan and clean it out. Can check rod bearings with a little plastic gauge stuff and replace if they show wear. The bearings really are cheap from places like IPS. May even go for an oil pump. This is prime time to do so many things to renew your engine cheaply, such as all seals and gaskets. A nice red paint job too!
Have fun!!
dick