And the answer to your question about what the piston can handle...
You can order oversize 3L pistons (up to 0.030" over), but using a stock 3L piston in anything over .005" over or so is going to be a problem (basically, you can't bore it -- just aggressively hone). It won't be a good enough fit (get lots of sideways play).
The cost of rods & pistons makes upgrading to a 3.2L too expensive unless you get a old busted 3.2L motor or get the set from the SHO Shop (which is still a lot more than $950).
$1500 for the SS kit:
Kit comes with following:
3.622" Bore Lightweight Forged Aluminum Pistons Piston Pins and Retainers
Set of Chrome-Moly Rings
Set of Connecting Rod Bearings
Set of Main Bearings
New Oil Pump
Lower Gasket Kit
-Lance