I don't know any specifics on how much room there is before hitting water jackets or how they can modify for larger valves, but the valves are already big enough that they are right up against the cylinder walls as it is in factory form. I've heard of some modifying and being able to run larger valves before.
The ports can take a good bit of porting, but the exhaust side doesn't really need much. Just a good clean up. The intake needs a lot of work..
All I would do myself is simple cleanup work like smoothing out casting flaws and such. I'm too scared of messing up the flow characteristics. We smoothed out the exhaust side on my spare heads and it took hours upon hours just to smooth them out. These heads are incredibly hard and take forever to get any work done. I don't think it's worth doing yourself unless you know what your doing.
There are shops that port these heads, but an actual new casting for higher performance... No, there aren't any. It would be cool if there was and there would be a benefit. We see pretty good performance improments through porting.
Usually around $1000-4000 depending on how crazy your going. Call up Diesel Innovations and ask them what they would charge. I haven't talked to David about porting mine yet, but he is who I'm going to use on mine.
I just checked Empire and they charge $1000 for a "improved street" port, $2000 for a "hot competition port", and $4000 for a "full race" port.
My better halfs uncle is in the process of building a pulling truck with a 99-03 7.3L. Between him and his brother, theyre basically car geniuses. They've discussed the heads several times. I haven't been in on most of it so Im definitely going to pick his brain when he gets done with his set!
Porting is real expensive, especially when you're talking cast iron and not aluminum. I've got a set of iron heads from back in the day that have over 200 man hours into porting them. This was done 30 years ago, but just sayin'. He got a little deep on one and hit a water jacket, but its been fixed.
Doing much porting at all is quite dangerous unless you know what you're doing. I burned through a 351w head before.. You gotta know where it will help, and where it will hurt. A flow bench is required to do it right. If the valves are that close to the cylinder walls the way they use bigger ones is notch the cylinder for clearance.