Very common delema. keep in mind that at those levels your pushing a stock block. Under boost .. your asking for a headache. I was in the exact same spot.
Here is my plan sold the heads, intake carb MSD hearders and various other SBS stuff, also sold the Bell housing, seling the trans (4 spd) end of day made around 2k.
Phase 1 GTO drop out 6k 400 very reliable HP, Phase 2 magna charger, 550-600 very reliable hp. Not pushing the limits of the hardware.
Now if you were to lower you HP numbers then you can be safe at the 500 hp mark.. For you edescribe use that is a good number and very achievable with you Gen1.
My advise start with the motor with the most potential the LS
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