I just had a 40 block bored to 3 3/16 (3.1875) std, with my merc crank gives me 255 cu in, did not want to chance going more with that block. I think your block could go more than the older block.
Your definitely safe going to 3-3/16 done it many times myself exactly like Kurt wrote above. Adding a Merc crank and your at 255 cubes. Only ten less cubes than the 265 idea.
Ronnieroadster
Nice one Pete. Built several 3 7/16 X 4 engines, one is still running. I also have a 296 engine that's still running, and it has Hyperutectic pistons in it. Only set I ever saw, baught them at the Yorl flea market back in the 90's
Gramps