Even the 1HP per cubic inch Falconer needs too many RPM to make that power. The Falconer is sort of neat, sort of cool, and excessively expensive. It's "outstanding features" are that it's a V-12 and well, it's a V-12. And it is way too expensive for anything that it does, other than being a V-12.
A big block based engine will be less than 150 pounds heavier, a only a couple of inches taller, longer, or wider. It would be far smaller than 75% of a V1710 Allison.
As far as what is available commercially goes, if you are not hung up on a V-12, there are 750 cubic inch big block Chevy based V-8 engines out there now, and in fact, a 900 cubic inch version. For the same amount of stress you apply to the Falconer, I can get 250 more HP out of an all aluminum big block Chevy V-8 for about 1/2 the money. An all aluminum 620 can be built for less than $18K, and produce 1000 HP normally aspirated on pump gas. It'll make 650HP at 4000 RPM, and 950 foot pounds of torque at around 2500 RPM. And it weighs LESS than the Falconer.
How much power is necessary depends a great deal on how much performance you expect.
Considering where the engines, the weight, and the power is produced and applied, I'm not convinced a 3/4 scale P-38 will be safe and strong if it weighed 1/3 what the original did. Especially if the goal was to produce performance equal or nearly equal to the original. Sure, if your goal is a ceiling of 25K, a top speed of 300MPH, and limits of 6G positive and 3G negative, with a short range, that might be okay. Personally, for the money I'd want more.