First off, the claim that your 260 will never make 200 hp is erroneous. The same power adders that the Supra needs to make that kind of hp will do the same for a small block ford. You could always use a 289 crank, forged pistons, some afr heads, a performer rpm manifold, a streetable hydraulic roller cam, the Shelby style centrifugal supercharger, and you will putting a LOT more than 200 hp down. Actually if you did all of the above and kept the 260 crank, and went with an aftermarket head with no more than 165-170 port volume (w/a naturally aspirated mill), you would STILL be way beyond 200 hp. Use some full length tri y headers and you would have a fun streetable car without having to go “boy racer/rice boy” with the power plant. Ford managed 271 hp from their hottest street 289 and Shelby managed 305 hp with a better intake, hotter cam, bigger four barrel. All the of this with the FACTORY 289 heads. The only difference between hipo and non hipo 289 heads is screw in studs and guideplates. Also keep in mind that the 8” rear end while good, will become a grenade with a mill like you want. It’s your car. Do what you want, But if you decide to sacreligiously put a Toyota mill in it, then I will happily pay for the shipping on that 260, build a stroker mill out of it and put it in my ‘68 Cougar when the 289 dies (Dyno proven 325 hp naturally aspirated don’t tell me you can’t get 200 out of 39 fewer cubes).
I’d just as soon be shot in the face with a fart cannon than put a Toyota engine in a classic pony car.