Please see the most recent updates in the "Where did the .com name go?" thread. Posts number 16 and 17.
A couple of things I can think of:
- The P-38 already had issues with compressibility (transonic mach) in a powered dive. More power would have caused more problems.
- Packard was producing the US Merlins, mostly for the P-51 productions lines. They would need to triple their production to also outfit the P-38.