I am not sure how much further you could push the Pegasus (or Mercury) without extensive revamping.
Compare to the Wright R-1820, the Pegasus was an R-1750/3 engine. so it was about 96% in size.
It did use a 190mm stroke compared to 175mm so piston speed was higher.
The Pegasus was lighter.
While the Pegasus was rated quite as high for take-off in high gear it was rated at 885hp at 15,500ft max power while the R-1820G200 was rated 1000hp at 14,000ft.
To get the R-1820 past the 1200hp take-off and 1000hp at 14,000ft mark required a new crankcase, new crankshaft, new cylinders with totally new method of finning. new cylinder heads and even more bolts holding each cylinder to the crankcase.
You might get a few tweaks on the Pegasus but large improvements seem difficult and well beyond the abilities of any company that foisted the Tiger on the aeronautical community or thought that Gnome Rhone 14 cylinder engines with their lack of center bearing on a two row radial were the way to go.