When I worked at Radbourne Racing, we used a Giardy van as our parts dept runabout, complete with a Nardi 652cc conversion.The boring out of the crancase is, I would have thought, a couple of hours work at the most. Depending on the depth of the barrels (the 126 barrels are 10mm shorter than the 500 barrels) you MIGHT need a 10mm steel 'spacer' plate between the top of the crankcase and the bottom of the barrels. When we did the conversion on the cars, we didn't put any strengthening plate between the barrels and the crankcase. These are available from a number of Continental suppliers. By hunting around, you might even find a dedicated Giardy conversion kit (try "Nanni Ricambi" for a start, but the carb that they are using in the kit is NOT a genuine Dellorto). If you go up in engine size, you might require a larger carb, again available from continental suppliers.
The Giardy is heavier than the standard saloon, which might explain some of your lack of performance vis-a-vie the car, but you have Fiat 600 brakes which will help when enhancing the performance.