A report I've read suggests the engine may have been down tuned by Morgan... If that is the case, upping the performance ought to be simple.
Official horsepower ratings seem consistent with data published by S&S Cycle. (See Mog3 Wiki/S&S Dyno Chart )
Horsepower ratings in brochures look like either an error, hopefulness, or a misread of peak torque as peak horsepower.
However, it is certain one could get those 120HP from a 120+ cid V-Twin, assuming disinterest in reliability AND assuming the rest of the drivetrain could take it!