Yes, you certainly can make 200HP at the flywheel with a 260, and it does not take much to do it either.
Upgrade the valve train to adjustable rockers and screw in studs so you don’t have to worry about the 5400RPM rev limiter built into the stock heads. Recurve the distributor for a quicker advance. Install a 4bbl intake and 4 bbl carb. The Autolite 4100 model carb is very good and comes in either 465 cfm or 600 cfm, but it is a used item these days. Or a Holley 570 cfm Street Avenger is another great choice. Put some headers on and you should be right at, or a little over, 200 HP when all is dialed in right.
If you wish a different cam and some head work can be done also, but now you are really changing the motor and the finished package should be taken into consideration before buying anything. The above mentioned bolt ons (except for the screw in rocker studs) are relatively cheap and easy to do, especially if you take your time and buy used parts. Good luck.
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