Quest for 7's in the 1/8
I'd like to offer a little more incentive for a 904.
* Chrysler did some back-to-back testing in the '70's between a 727 and 904, I believe in their Super Stock small blocks. Built the same with the same spec converter, the 904 was about .15 faster at the same overall car weight.
* You don't have a weight minimum, so you will save 30lbs, or whatever the weight difference is.
* A 904 has the option of a 2.74 low gear, which tends to help lower torque and/or heavier vehicles. They usually come in a later lock-up transmission. But a knowledgable Mopar/torqueflite trans shop will know how to get rid of the converter lock-up parts.
* I have never seen a 904 blow up like a 727 can. Smaller, lighter drums help minimize the possibility. The sprag can still break if you do a bad burnout or have driveline breakage.
* A shift kit/manual valve body will help some, doubt it will be enough, but every little bit adds up. And it will help transmission life by reducing slippage/heat. Use 3.8 or, preferably, a 4.2 lever.
* Use Spicer solid u-joints for strength.
*A converter upgrade will help the most.
I know you're on a budget, but most of these mods may eventually be done anyway and will help ET as well as longevity. So perhaps you could wait a little bit, save some extra $$$ and only pull the trans once. (Build the 904 while still racing the 727!)