Here's why adding power to a displacement hull is a bad idea. A displacement hull creates a bow wave and stern wave, and the wavelength is dependent on the waterline length of the boat. We also know that the speed a wave can move through the water is dependent on its wavelength: longer wavelength = faster speed through the water (speed=wavelength/period.) (This is why waterline length can be such a determinant for top end speed of a displacement sailboat.) Once you hit hull speed, yes, you need exponentially more power to make it go any faster. However, as you do so, the power goes into making the amplitude of the wave greater. This means that as you apply more power to the displacement hull, the bow and stern waves get taller. As Chapman's points out, at the extreme, this can cause the middle of the boat to be unsupported by the water, and can cause hull damage. Honestly, I think they really mean damage in ships, barges and the like, not so much the average sailboat.
Since we don't know what kind of boat we're trying to hot rod, but we do know it's a free sailboat, I think we can safely assume that if it's big enough to house a V-8, it's a big displacement hull. Wedge shaped, flat bottom sleds like the VOR boats, or a Pogo cruising boat, which can actually plane, are unlikely to be given away for free.
I know a guy who has been playing around with West Wight Potters. He added chine foils to a 15, and then put a 35hp 2 stroke Mariner on it. It turned the semi-displacment hull into a planing hull. He has been working on doing the same to a Potter 19, which is also a semi-planing hull. For that matter, I know of a sail dealer who customized a WWP 19 with a lead bulb lifting keel (for appropriate righting moment) and then put a Code 0 with top down furler on a long sprit. I don't think that it will pull the boat onto a full plane, but she reports the ride is very stable and she chases down 27 footers...
I think if you wanted to sacrifice the cockpit floor, and do extensive modifications for structural integrity, you could put a V-8 into a Macgregor 19 or a 26X, and get all kinds of planing and speed. Or maybe a J70, or other sportboat, they plane too. But you ain't gettin' a J70 for free!