I have a velocity 280 with hp500 and KE performance mechanical pump. I'm losing fuel pressure over 4200 rpm
dropping to 2-3 lbs. What fuel pump would you recommend to solve the issue?

How old is the pump. Did you ck to see if you can just purchase a rebuild kit? Otherwise if it's served its purpose and want to replace it I'd just replace with another KE or compatible gph Holley.

Sea pump mounted??? Then use a stock Merc pump.

Do you know what size fuel line the stock pump takes? I have all -8 line now. I put a replacement pump on and solved the problem but it only has 1/4" line

Glad you got your problem solved. So you went from 1/4" npt to -8AN. I don't foresee any issues what so ever and noticed most all stock replacement pumps have 1/4" npt. Your carbs will never know the difference. When I plumbed my revved up 496's I was all concerned about making sure I had all -8 an fuel lines and then realized when I changed from barbed to AN on the fuel filters it kinda shot the whole theory in the azz. I ended up doing the same as you. I'm not going to starve for fuel especially in an NA engine.

Worse case scenario in your situation you might see a C hair loss in pressure however I highly doubt it.

Just another reassurance the pump you bought I would have to imagine is over 100 gph which is over double of what you'd need at wfo. If you were running 1/4" fuel line and 90 deg fittings then I'd be concerned but that's not the case.