I've thought about doing a cast iron deal, but if you try to make a set of factory cast iron heads perfect, you'll end up with more in them than a new set of BBM or Survival Motorsports heads. They pretty much all have sunken seats, need exhaust seats, need guides, need milled, need the valve guides cut for good seals, etc. Plus, the flow just isn't there. You're looking at low 200's for flow vs. almost 300 for the newer as-cast aluminum heads. That's a HUGE increase in horsepower potential.
You could certainly upgrade the rods and crank to stroker pieces and that's always a viable option, but the horsepower that a modern-headed and modern-cammed 390 would make would be pretty impressive.
I just know a lot of guys want the FE look and want good hp/torque but they don't want to spend $13-18k. Even a $2500 savings in the cost of the engine would free up the budget for car goodies.
I may do something like this for the small block guys too. One of my builder buddies just did a 306, pretty low-budget that made 330 hp and 360 lb-ft. That would make a 289 style car boogie pretty good...