I have a Formula 357 SR-1 -88 twin 420HP 454cui TRS drives need 500-550hp what to do.

Stroke 'em!

Bore & Stroke to 489 or 496. Call RMbuilder and have him design a custom roller cam. You may need a exhaust upgrade? You should have the Gills but you may need long risers. Did that engine come with alluminum intake?

Are you trying to keep as much together as possible?

With the 420Hps you should have the rect port heads right?

Step 1) Rip them off and shave them down to bump up the compression, whatever you do, don't port them! Polish and smooth the inlet tracts, reshape the ridges arounf the valve stem and do a really good 3 - 4 angle valve job with a back cut. Better yet, give them to someone reputable and tell them your tgt hp and your package.

Step 2) While you've got the heads off, replace the cam. Search on here but everthing you find will tell you to call Bob M. (RMBuilder) Find his number, call him, get him to make you a cam for your set up.

Step 3) Decide on what package you want (intake and carb to go with RMBuilder Cam). Id suggest the PRM Air Gap dual plane manifold or a Victor jnr / Dart single plane. Add a Holley 850 Marine DP (4160) carb or a BG Demon 850. Upgrade your fuel pump and add a regulator if you go electric. Add aftermarket exhaust (budget for this step first and foremost). CMI E-tops, Lightnings, EMI, Imco, you get the idea. Get good risers if you go with manifolds.

Step 3) Prevent it all from going BANG. Invest in decent AN-12 oil lines and fittings / adaptors, aftermarket (Hardin) oil cooler and a Canton adaptor plate with a remote mount filter. Rebuild your water pump(s) just for the sake of it. Check you ignition and upgrade your coil to an MSD Blaster 2 / 3. Upgrade your leads to a good qaulity lead set too.

Step 4) Let cool, stir and enjoy! (Cam Dependant) You should be able to get an honest, reliable and bullet proof 500-550hp from a package like that with little worries. Tune it to suit your use and enjoy it.

Easy.
Now let the arguments begin. (Someone will say "Put a Blower on it!")

I have exactly the same boat and power. I pulled the 420's and had them stroked to 496, roller cams, 4-7 switch on firing order, internal balanced, and blue printed. I used the old heads. No port work, just all new seats, guides, valves, etc. I,m changing to 3" oil coolers and new lines. Changing the carbs, but haven't decided which one's to go with. One engine done, will have the other next week. Ran it on the test stand, but not on a dyno. Sounds really good.
Buy good quality parts and find a good marine engine builder. You'll be good to go. Good luck...BC

Ditto all of above, I however use the DUI distributor.

You have a good base for building a 500-550 hp engine. Forged internals. I agree with what Ghostrider said, a good pocket port on the heads. bump up the compression 9:1 and the old 741 cam or equivelant will get you in you HP range. I did the same thing to my Merc 425's contiplainted the 496 route and decided to stick with 454's new heads and solid roller cams, very pleased with the results. almost 600HP

Now remember it is the base of the 525SC, a B&M 250 and your there

The Thunderbolt IV is more than enough ignition for what you are doing, IMO

Leave it 454 CI. Use the square pot heads. Edelbrock 454-R single plane intake. Incerease comp around 9.5:1+-. Call bob for cam.

You don't need a bigger carb than 750 +-. I have tried biger ones on the dyno and they don't help with the HP as the engine can only use as much carb as it needs.

The shorter crank will let you rev that engine higher. If you don;t mind ocasionally spinning it over 5000, then you should have no problems getting the piower you want. The sroker kit is not worth the extra cazh IMO?

Put a small blower on it. It's the least expensive way to 500+ hp out of a 454. Even if you have to do a refresh first. Over 500 hp NA, you have to spin them too hard and they have lousy dock manners.

I am allready spinning it 5200 at WOT so thats no problem.