You'll be better served with flattop pistons and deck the block to keep your squish around .036-.040"
Since the motor is already at the machine shop, all you need to do is compute where the deck needs to be.

Peanuts heads are around 116cc or so. You can deck them and drop that a bit if needed.
At 116cc, and a Marine FelPro gasket (.039 thick/4.37 dia), if your pistons are true "flat" (0cc), then you'd deck the block to stick the pistons out of the hole between 0.000 and 0.003". This would give you 8.4:1 actual CR.

120cc Peanut heads and a -22 piston would put you at 9.70:1 at .036 squish. That dome will increase flame travel distance, needing a little more ignition lead. It might be a little ping-happy unless you run a lot of cam.

Something with a -12cc dome at .036 squish would give you 9.0-9.1 CR, KB pistons do a good job of taking squish into consideration.
Or if you're getting a raging deal on the Speed-Pros, then they have an .030 over piston with a -10.5cc (8.9:1) and one with -13cc (9.03:1).

So, unless you are going to go with big heads, just do some work on your peanuts, match up a good cam (I honestly don't have a good recommendation for a peanut cam, but there is a very inexpensive Speed Pro cam that mimics the Merc 420 cam - but that's for rectangle port open chamber heads and I wouldn't necessarily expect it to be the best bet for your peanuts - dunno, though.. somebody may have some experience with that).

Center riser Merc exhaust manifolds are out of gas at about 450hp. A 350hp motor won't benefit at all with a swap from Merc center risers to aftermarket exhausts (both thru hull of course). A 400hp motor might or might not see an improvement that is noteworthy. A 450hp motor will certainly be at the upper limits of the Merc exhausts and would benefit from better exhausts. There's your rule of thumb.

Crank - no problem as long as you keep your revs under 5,200.
Rods - please put in ARP rod bolts if you plan to keep your stock rods. Period. (any rod bolt change requires resizing the big end).
Carb - your stock carb will support 400hp. Just rejet and put a less restrictive (taller) flame arrestor on it.

MC

I've talked to Dennis Moore and he suggested a 224/230 duration cam on a 110 LSA. I also don't know where people keep getting 9.7:1 with -22cc dome pistons and a 120cc head. If you do the math correctly it only comes out to 9.4:1 assuming .020 piston to deck clearance. Only way I could get 9.7:1 would be if i decked the block to zero which I am not.
Also you are off on your 8.4:1 calculation with flat tops if i put in 116cc with .003 over the deck with flat tops I get 8.55:1

Im also fairly certain my math is correct as I don't have an engineering degree for nothing...

Also true peanut port heads are between 119cc and 121cc from the factory and are listed as 120cc. If your seeing a peanut with 116cc then it has been milled.

Thanks for everyones responses.