how much horsepower can the 904 take?

You could definitely buy individual parts but there are probably kits that feature many upgrades. Of course a 400 hp transmission is a lot easier to source parts than a 500+ hp 904.
I am considering around 400 hp for a street performance show and go car. I will never race it, not my thing. I am considering building the engine and running the Torqstorm Supercharger.