Pretty lofty goals there, young man! Yes it can be done. No you probably don't want to do it. 500 streetable hp can be achieved by spending alot of money. Not really sure how 'steetable' it'd be either. The bottom end would have to be built to race car specs. An ARCA/Esslinger head would have to be purchased and reworked. Conversion to MAF would be required as would a stand alone management system. The standard T5
tranny wouldn't hold up to the torque, nor would any readily available rearend short of a 9" Detroit Locker!
www.esslingeracing.com and
www.racerwalsh.com would be places to start if you're determined to embark on that endeavor.
Please don't take offense at this but, as a first time poster, I'm surmising you're probably a 20-something with limited funds. I may be totally wrong here! But, IMHO I would suggest a goal of 300 hp for a street driven vehicle. 300 hp in a fox body will bury you in the seat and blow off just about any 5.0 in the neighborhood. It's easily attained with junkyard parts and some deft dealing for off the shelf pieces. It won't break the bank, will be much more streetable, easier to maintain and will allow you to drive the car more often as opposed to working on the car all the time. Just my $.02.