redfox33: Glad to hear another BLR fan has been made - they sure are a sweet carry.
With regards to to your re-barrel project, I believe the decision should be based in part on the barrel length you are thinking about. Your 7mm-08 had a 20" barrel, as do most the the short action length BLRs. If you decide on a longer-length barrel in order to get some of the inherent performance out of either the .338 Federal or the 35 Whelen, you might lose some of that handling factor that you like. Also, the action length for the 35 Whelen would be longer, by necessity, which may cause a difference. If you decide to stick with the 20" barrel. I would probably be inclined to get the 338 Federal, as you would probably lose less performance out of its smaller case than you would with the larger 35 Whelen case.
Another point to consider is simply that neither cartridge seem to be big-sellers currently, so factory ammo choices and availability might be an issue - unless, of course, you reload.
Yeah, if it was me, I would go with (or, in my case, stick with) the .358, but only since I reload.
I would be curious to hear who you are thinking about getting to do the work and what an approximate cost would be. I have always thought that a BLR in 250 Savage or 260 Remington would be sweet.
Good luck with your project.
pagris
1977 .358 BLR
1980 .358 BLR - original owner
1987 .243 '81 BLR
1991 7mm-08 '81 BLR