Dave,
The great fuel economy is due to a few things... First, the truck weighs some 2500-lbs less than my 2500HD Crew Cab Duramax/Allison. Lil-Red's gained a little since it was first put together, but it's still less than about 5,200-lbs or so. Second, it's fairly aerodynamic for a pickup truck, rides lower than a 2500/3500, it has a front air dam, tonneau cover, 3.42 gearing and 32" tall tires (~2000-rpm at 80-mph). Third, it's an LB7 without any sort of emissions control (not necessary for this engine in this truck). My 2001 GMC D/A didn't come from GM with any factory emissions control hardware (EGR) or exhaust system cat/DPF either - the good old days...
Hard to tell for sure what the fuel economy is for Sarah's 6.5. We haven't driven it far enough, in a fuel economy setting to know. But, the one tank I did check it was 16-17 if I remember correctly, which was mostly local driving. For comparison, Lil Red gets about 19-mpg during local driving, so I suspect the 6.5 Blazer would get about 20 on the Interstate. The Blazer has 3.73 gearing and the 4L80-E has a .75 OD ratio. With the 265-75R16 tires it has, this'll produce ~2380-rpm at 80-mph, just to compare it to Lil Red. My experience with the 6.5 seems to show that 65-mph is a better fuel economy speed - or about 2000-rpm.