how much horsepower can the 904 take?

As everyone has said, a properly built 904 will take that 360 without an issue. For example, there are guys running 904's behind big blocks "with an adaptor" in super stock classes. The 904 is a much lighter, and less restrictive trans compared to the 727.

Hmm adaptor is new to me. I know that many racers use the 727 case with 904 internals to save weight..