Ok 10,000 to spend

Forged internals, MPH stage 3 heads, MPH custom blower cams, and crank up the boost. A t-56 or a tko wouldn't be a bad idea?? MMR makes some really good tko's if you're going to be taking it to the track. You should easily see 500+ with that combo.
 
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OK I have listened to you AND read your mods

I say
Forged internals (powerhouse doesn't seem to have their forged blocks for sale anymore)
A TKO/ Tremec Tranny
Aluminum drive shaft
31 spline axles
Cobra fuel tank and fuel pump
Up the injectors
(does your S/C have a FMIC?, if not get one)
New clutch
New fly wheel
Larger brakes
Short throw shifter
the rest will be install and labor unless you do it yourself

Even after this you are going to need suspension mods.
Or you could sell your car for $12k and have $22k to spend on a cobra. You would have everything you need and $2500 more and you would be at 500/500
 
If he goes suspension then he will have to skimp else where

Forge up the block and you blow the tranny, driveshaft and rear end

run 500hp and you need a much better fuel supply

I would want better brakes with that much power

So with forging the engine
buying a better tranny
Beefing up the drivetrain from clutch to axle
upping the fuel
increasing the stopping power
you don't have much room to spend unless you install it all yourself.

I agree throw some LT's on there while the engine is pulled.