I wouldn't say 220hp from an L20B is impossible, especially via the rebello type 2.3L approach, but you'd better be prepared to spend 10s of 1000s dollars to get it.
Same goes for a 2L Ford OHC, several in classic escort racecars here in NZ are rumoured to have 220hp, but they don't come cheap either.
As for thirty years ago, David Vizard tuned one to make 230odd hp, and said more was quite likely possible with further development. Development which costs serious coin. Up to about this 180hp is RELATIVELY affordable (ie maybe less than $10K) if you listen to people in the know.
I don't know about Ford getting 'only' 185 from the OHC engine, this might be what they got from a Gp 1 rally engine, which is a reliable, driveable, rally engine, not an ulitmate flat out racer aiming for top hp. And maybe Ford were too busy at Cosworth getting 240hp out of their 2L BDA RALLY engines.
Whoah, back on topic anyway, I reckon what applies to a 2L Ford might roughly relate to an L20B, aim for 180hp,which really is still a lot of power in a little rally car, spend a fraction of the money, and GO HAVE FUN in it. If you feel you need more, and that you can drive your 180hp Datsun to it's limits, then good, built another engine, and aim higher (=spend more

). And don't forget to save some extra for a strong close ratio gearbox and good diff to go with your 220hp engine, and for the chassis development to match, otherwise the guy in the escort with 'only' 185hp and a quaife gearbox and diff will probably whomp your arse, and he'll still be having HEAPS of fun.