Dave congrats on your purchase, isn't that a beautiful little jewel once you get it uncovered?
500 HP in NA trim isn't impossible, but remember you've only got 4.0 litres there, not 5.0-5.7 litres. 500 BHP is 125 HP/L, so at that level it'll be a full race motor, temperamental, and not really driveable on the street. Richardson Motorsports just built a 534 BHP 1UZ motor over in OZ for Bob Muir's Reynard racecar, so it can be achieved, but anything over 100 HP/L, or a redline much over 7500 and the build costs, and the motor's longevity are going to be compromised.
350-400 BHP NA can be done with these motors with cams, bigger valves, head porting, good exhaust, etc. If you want more than that, there's always supercharging or turbocharging.
You can spend around $10K with an engine builder, putting the right internals in there and get that power in NA trim, or you can spend $5K to $7K for a supercharger or turbocharger setup and leave the internals alone. As Fran said, keep the boost fairly low - the motor already has 10:1 compression.
Lots of good EMS's available - if you're not prepared to tune it yourself, then pick a tuner who's near you and listen to his recommendations. Aftermarket EMS's aren't "tune it and forget it" like OEM setups.
If you'll PM me your email addy, I'll send you some tech literature on your motor. Good bedtime reading
