Haha, another boat load of people saying T2 wont work, blah blah. I'm proof of 500whp with a T2. Enough said about that...
All said, it's in tuning. Regardless of what fucking turbo you use. It's like supercharging something like a factory S2k, or an Si Honda. But not even a supercharger, hence the 'T2 turbo' mentioned for the fast spool. Tune it, and it will work. Plenty of production vehicles out there right now with this same exact thing the OP is talking about. BUT, with the aid of race fuel; or E85 being my favorite, and forced induction.
There are plenty of threads out there with other setups that do pretty much what the OP wants. Instant boost (with a supercharger), and using high compression pistons, all while running a 'race fuel' or something with a higher octane. No, you can't just slap something together; and unfortunately you need to know what you're doing.
You will probably not have high horsepower, but a crap ton of torque early in the rpm range. You will have to choose cams accordingly to do this, and degree for the powerband you want. And you wont be able to rev very high, and/or be very efficient past a certain point. Look at some of the road racing and autocross cars dyno charts. You'll see 250 whp at something like 3k, and it will go flat all the way to like 7k. They can't make over 250whp, but they make it early, and tune for it for the rest of the powerband.
Here's a final example if you can't make heads or tails out of my ranting post. And this is generally speaking with any boosted motor:
You run 20psi of boost on pump gas, and make 200 whp. You then run 50psi of boost on pump gas, but only make 300whp because you have to (slam your baby on a concrete curb headfirst) retard the hell out of your timing so you don't detonate. There becomes a point to where you are adding so much more boost, but not getting any power because you have to dial back timing.
Now, said guy comes back with same motor and wants to run 50psi again; BUT, he gets smart and runs race fuel (or my fav E85). Now you're cooking with fire because you can start to advance your timing, and guess what.... MAKE POWER because you're not dropping your kid on the curb again... ( i really hope this is ringing some bells here )
Now the same concept is applied for raising compression using a constant fuel source. (without boost)
You dial your 'all motor' 9:1 compression 'beast' in within the threshold of knock; all while using 'pump gas'.
You then raise your compression to 10:1 - This is a problem because your tune is dialed in for 9:1. Well now you have to (again, drop your child), retard your timing or you get knock/make less power.
Well we all know that if you raise your octane, you get rid of knock, right? So in order to run the same timing, but only change/raise compression, you now have to run a higher octane fuel.
Now lets put this recent 'boost' and 'compression' lesson to light when you combine the two:
Raise the compression of your motor, and boost it with pump gas. Well, usually a bad combo when you leave your timing alone. Well, lets say we tune the motor for 'high compression, with boost'. All you pretty much do, is pull a crap ton of timing, and the car will run; and run rather well when tuned.
Now lets say we have the same boosted, high compression motor; but use a higher octane fuel. Well, we can advance the timing and start making power out of it before detonation/knock becomes our problem from which we originally want to tune up to/but not pass the threshold.
I'm giving up past this point. I'm tired of trying to explain this to people who haven't had a hands-on with some of the stuff they put their .02 cents in on. I think that's why I stay off the internetz anymore, and stick to what I know with hands on experience.
*I look forward to your letters*