I believe some people have increased the HP on the 5.3, however I think the tranny is definitely a weak link that should be taken into consideration.
I would suggest that you check out the LS4 front drives section of LS1tech.com,
http://www.ls1tech.com/forums/forumdisplay.php?f=108
There are many who have modified the car there, you will probably get more response there, since that section specializes in the vehicles you are considering.