904 or 727 ?

They weren't offered in the 60's because the parts used in them (clutches/Plates) were not as stout as they are today. The factory didn't want warranty issues. Today parts are light years better than in the 60's and many of the alleged weaknesses have been addressed.

500hp/tq is not an issue for a 904. You start throwing 700+ at them and they won't live. The OP is asking about a 500/500 engine, not some 700+ deal.

904's drums don't detonate like 727's do either, that's one reason I stay away from them.

There is no reason to run a 727 in a 3500# car anymore. Build a decent 904 with a 24 spring kit, decent valve body and go.