After half a century wondering what is considered the best power setup inboards outboards, layout, drive etc for a the classic granddaddy 233.

I would say mercruiser bravo 1 and bigblock.

Great question. I still have my 78 233, however it has been mothballed for 15 years. It came with small blocks and alphas, my plan was to replace them with 383MPI's and bravos. It has so much rocker built into the hull, it needs to be stern heavy to ride well.
I have now acquired a pair of 2 stroke outboard 200's that I will be installing on a flotation bracket.
Edencraft in Australia is currently building the same hull.

Putting a new merc racing 520 ITS Bravo XR shorty in a 69 now

Curious, what did you end up doing...

Flotation brackets, well set-back period on the 233s, with twin 200 outboards or more, have proved to cause diminished handling. That's why most 233 owners use jackplates on the transom with hardly any set-back. The same goes for EdenCraft. Only customers who prioritize room onboard get a flotation bracket if they insist.

Interesting, thanks for the info. I have jack plates and mounting them on the transom would save a ton of work!

I had twin obs on last boat with a stainless marine bracket, bit faster probably,but looks way better with motors on the Transom...