"....Shortly before the Avanti was introduced" would have been way too late. The drive-train system would have had to be re-engineered, and that would have delayed the introduction by quite a bit. Sherwood was in a great hurry, and for good reason. Besides, using Ferrari engines would have driven up the price of the car by a lot, certainly pricing the Avanti out of the (Corvette, Riviera, Tbird) market.
I do think that Studebaker should have bored out the R1 & R2 engines 0.080" to make the displacement 302 cu. in. There was a displacement race then and 3-something sounds better than 2-something. Plus, "302" would have separated the R1 & R2 engines from the plebeian 289 engine. And, they could have cast the intake manifolds out of aluminum to take some weight off the front end. Plus, how much more could the R3 exhaust manifolds have cost to manufacture than the regular ones? Adding both of these as standard would have added considerable "wowee" factor when people looked at the engine. Adding, say, $100 to the price of the car might have been worth it. After all, the Avanti wasn't intended to be a volume car, or even a profit maker; it was intended to be a traffic draw at their dealers.
Dwight ('63 Avanti R1, '64 Avanti R3)