What would you do with my scenario?

I'll potentially be building a turbo engine over the next 1-2 years. I currently have a spare dual bolt pattern block. 200ci. I picked it up 'with low miles, had recently been rebuilt'. I have never ran it. It is .040" overbore.
When I bought it I tore it down for inspection. This may have been a bad idea but I'd planned on swapping some parts. I currently plan on making it a high-horsepower build. I may or may not go with forged pistons, to be determined.

IF I wanted to get new/forged pistons, could I get .040 larger and put them in no problem? Would I need to re-cross hatch the bores for proper break in? Is that a strange thing to do? I.e. a complete new overbore is necessary?
Should I just spend a little more time/money now and just (attempt to) get another block that has little/no overbore? Should I increase the bore to .050"?

You will need to start by taking all your stuff to a competent machine shop, and have all the pistons mic'd and the cylinder bores checked to see what clearance they have now, and whether they are still round and straight. Chances are good that you might be able to get by with just having the machine shop do a touch-up hone on the cylinders the get them back in good shape, and stay at .040 over, even if you swap to forged pistons. If you are planning to step up the power level considerably, then you are more than likely going to also upgrade to a better piston ring type from a stock cast iron ring to perhaps moly or stainless, and these premium ring types also require a different hone finish than what your block probably has currently. So rehoning the cylinders would be a good idea regardless.