Using the 301 is workable for some serious power. The trick is in the flow of the heads (if you can get it). I currently own an 80 Turbo TA that I have been racing since I bought it in 94. I have had many mods done but nothing serious till now.
I was getting Mid 13's runnin 9 psi with just a Crower Cam with about .454 lift on Intake and Exhaust. Boost was run up to 13 on my "Friday kill Mustang Nights". No idea what my 1/4 times were with 13 lbs. boost but it was noticeably faster. My tires definitly felt the difference.
These are some of the ideas im ramming into my current project that might give you some ideas but some I won't use due to expense or confidentiality.
1. Arias Pistons Co. can make custom forged pistons if needed for around $100 a piece.
2. Crower Cams is known for carrying "Turbo" type cams modified for turbo engines. They carry them special for Pontiac. (unlike other popular brands who don't carry them at all.)
3. Polish your intake ports. They can be widend slightly. If you can, have a shop weld in a small triangle shaped pyramid below the inlet. This will help disipate the pressure to the sides.
4. Polish head ports to match intake. Some might be more narrow but it can't be helped (what were they thinking?).
5. Get Pumped! Get a boost controller. They can be found at
http://www.turboxs.com/ . This might be the easiest way to play with your boost and help you decide on what octane fuel to buy due to the latest gas prices.
6. Get the right flow, get an Xtreme air flow top by K&N. This will help extremly well when an intercooler can not be done.
7. Run big exhaust.
These are some good basics but the pistons are the only real pricey item. Just use stock. I haven't blown one yet.