XE262 would be the largest I would consider especially with the 2.41. If while "street" driving this car it will rarely see over 3k rpm with the 2.41, you'll want to make sure you're producing good power by 2500rpm. I used a more traditional grind crower 60240 (210/221/112) in my low CR modification. It's a good cam and I considered the XE series but couldn't find anyone actually with track times/results with XE256 or XE262, while Cliff R had actual track results with an almost exactly same combo. With head milling, recurved dist, ram air exhaust manifolds and cam change I dropped over 1.3 secs from my 1/4 and picked up over 8mph and that was without playing with it any. I would love to know what the XE262 would have done, but I'm pretty satisfied. If you go with the XE please let the forum know any track results before and after if you have any. Oh I just reread your post, you already have the XE268, make sure you zero deck the block and I wouldn't bore it more than neccessary because you'll need all the CR you can get. If you're having a machine shop do the majority of the work and reassembly then I'd just let them remove the timing cover etc. Try to make sure you're machine shop has some experience with Ponchos. I mailed my heads to KRE just to be on the safe side. I think 300+hp will be very possible but those 2.41 aren't doing you any favors with everything else in the build. JMHO but you may want to look for 3.08, 3.23 or something close.
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