G'day, I'm doing pretty much the same thing right now so hopefully I can help a little.
Are you rebuilding your current motor or getting another one? Which ever one you are building, get the head off and check for corrosion at the back of the block. A lot of them these days are rotting out quite severely. Some of them get fractures between the water galleries and bolt holes as well so keep an eye out for that too. Provided that's all good and you do the correct torqueing and re-torqueing a MLS h/gasket should be fine.
The stock internals can take up to around 400hp comfortably so just give them a good clean up and check, replace all the bearings etc and you should be fine. New pistons would be a good idea though. One thing I'd definately recommend if the engines a dirty one is to get the plugs out of the crank before you hot-tank it. Other wise after the cleaning the grit inside the ports will soften up and get into your big-ends.
Power wise, have a look at Whatthe?'s old engine. He netted 250rwkw with intercooler, hi-flowed turbo, SAFC, SITC and the 1UZ afm w/bigger injectors by memory, he can probably enlighten you further on that.
I can't help you too much in terms of the head work, I'm just giving mine a good cleanup and making sure there aren't any restrictions but not planning for big cams or anything just yet. Most of your aftermarket cams out there will require a bit of head work to put them in, not many 'plug n play' setups around so it comes down to cost factor.
Sorry if I'm being a bit vague. None of this has been tested as of yet as my engine is still in bits but I'll keep posting up things as I think of them. For the moment 200-250rwkw is my aim but I want this engine to be able to take more power if I choose to without having to tear it down again and rebuild it.
Kudos to you for putting the work into building a proper 7M!
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