what to do first?
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the trans i would go with a suncoast GMAX6 kit or a PPE stage 5 kit
you need a bigger turbo, better pistons, better rods, bigger injectors, dual CP3's, lift pump, head studs, tie-rod sleeves
thats about all I can think of for hard parts
500hp you could get away with trans upgrades, little bigger injectors(to get the pulse width down) lift pump, and tie-rod sleeves, but it would all probably be on borrowed time
the duramax seems to be happiest in stock form around the 400-475 range, it should last there for quite a while
Hope this all helps