you might be right re the GT series as they are ball bearing cores (not used them as the cores arent rebuildable). traditional oil bearing cores are normally run without the water cooling connected in race applications, although im sure Garrett would have a blue fit if they saw what people do with their products
a GT3071 is a big old beast on a 1600cc motor though, although should fairly easily hit the target bhp figures. being a pure race-bred chassis, the resulting narrow power band should be ok, i suspect the current N/A motor is somewhat cammy anyway.
a split height/length IC/water rad could do the trick, is there room to increase the core depth as well? mounting an IC infront of the water rad is a possibilty too, although does tend to raise the water rad temps, but not as horrendously as youd think
im sure the oil pump system isnt stock anyway (dry sump i assume), so should be made to cope with tweaks