I'd be concerned with the hardness of stainless, or brass, over copper. I believe they used soft copper tube because it will conform to the bore when peened easily. You might want to test the stainless before you commit to putting it in the block.
304 is a work hardening alloy, but unless taken to a 'full hard' condition it tends to be pretty malleable. The material he listed states that it is intended to be bent, so I doubt it's 'full hard' - probably dead soft. It should be OK since the peening isn't moving much material and doesn't require sharp forms.
