I bought a 261 that came with an Albro / Schiefer aluminum flywheel. I am going to be putting this motor into a 49 chevy pickup with an SM420 and 3.55 rear end.

The truck will be a driver for my son. Does it make sense to keep this flywheel on the motor? Will a flywheel from a 235 fit if it would be better to run a cast iron flywheel?

Aluminum flwheels in heavy vehicles powered by engines with little power are not fun to drive on the street. Your son will be much happier with a heavier cast iron flywheel.

I couldn't agree more.

Can I safely assume a 235 flywheel will substitute ok?

Unless you fall into that 6v/12v interchange issue they should swap ok.

After the switch, hold on to that Albro flywheel Ken. They are rare. Enjoy!