In its original Gen I configuration, the SHO engine is severely limited by its front wheel configuration and total lack of gearing choice, in a one only fat-body sedan.
That same engine, in rear wheel drive form and preferred gearing, combined with sustained 7000 rpm operation, could be a formitable performer in any forum, even with its current horsepower.
Careful selection of body and gearing will yield huge rewards.
I would install the stock engine in the configuration you want and see if more horsepower is beneficial. You have traction to consider, and more horsepower never helps traction.