you're presuming he can do the work?
where's the cost for machine work?
fuel system upgrade?
clutch?
rear end?
there's a lot more than what you list
All very good points. The cost will vary depending on who's doing the work and the parts that are selected. The engine rebuild would need to include machine shop costs, new fasteners, gaskets/seals, bearings, oil, coolant, and labor.
Fuel system upgrades would depend on the target HP level. Bigger injectors plus boost-a-pump (up to 600 crank hp) for sure, dual pumps above 600hp.
Clutch/flywheel upgrades also depend on HP level. The stock TR3650 tranny is only rated to 390lbft so a tranny upgrade (e.g. TR6060 or T56 Maxnum XL) would be another item to add to the shopping list.
Further down the drivetrain, the stock two-piece steel driveshaft would need to be upgraded to an aluminum single-piece item. The stock rear end would need C-clip eliminator 31-spline axleshafts especially if drag radials or slicks are used.
Not a comprehensive list of items and I haven't even touched on upgrades to the suspension and brakes.
One might argue that by the time you've added the total cost of all these upgrades, you might be better off starting with a GT500 platform instead. However you'd be paying the price premium of the GT500 right away (even more if it needs repairs) whereas you can perform the above mentioned GT upgrades gradually as your budget allows. It all depends on how much you're prepared to spend.