a 509 with a decent head&cam package and an 8.71 with a pair of 850 carbs will easily make 850 reliable hp.if starting fresh with no parts go with a 540,if you already have a 4 in stroke crank go 509.the power output is pretty close on both combinations.

Better package...probably, but you would still most likely swap to a hyd roller setup with new springs and lifters at a cost of around 2-3k.
IMO, you'd prob get closer to 7-8k for your 509.

With those numbers you'd be at 9-10k out of pocket.
If you sell your 250 setup and swap to bigger blower, you could probably keep it to around 5k out of pocket.
Now, do you have 15k for a drive that will last behind it???

A turned up little motor or a moderate bigger motor making the same power, which one will last longer, which one has a better chance of detonation.

with efi and knock sensors,,neither.

850 hp in a 25 daytona cat will be a triple digit boat.

im not sure but a oso member [the deep] has a 25 warlock with a 509 i specked for him,your boat should run almost the same as his.maybe he will chime in on this one.i had a 26 american offshere with a little more hp and it did 106.it was almost 900 hp.i destroyed a standard brave in short order and replaced it with an xr,it was still on the boat a few years later when i sold the boat.