Bit of re-assurance for you; 19J engine isn't all THAT bad, just unloved, and to my mind, I'm afraid to say its still a FAR better choice of mill for a Series than a TDi.
It's reputation for being weak isn't entirely 'unfounded', they had a tendancy to crack pistons and heads, but the problems weren's entirely due to design, the biggest problem was the era in which they were made, and the abysmal quality control applied by the factory at the time; then exascerbated by poor servicing, hard use and old age.
A reconditioned 19J, put together with the attension to detail not paid at the factory, SHOULDN'T suffer the build quality problems; and with new rings, bearings, gaskets etc etc, the thing should have more life in it, and better reliability than it did when new, and I would stretch my kneck out to go as far as to say, a DAMN site more life and reliability than a tired old Disco TDi 'take-out'...... OK, so its a couple of hundred quid, rather than a grand or more, but your getting an engine with a full life expectancy in it for your money. So to my mind, expensive, yes, but not bad value for money in the greater scheme of things.
As for suitability; the TDi engines are highly over rated; they do not have the 'imense' amount of low down torque pundits claim, nor do they have a huge amount of power; as diesels go they aren't bad..... but then they aren't a revalation either.
And in a Series, despite not having the 'numbers' of engines that are known to kill series transmissions, they have a reputation of eating them just as badly, a phenomina which would seem to be down to the way that the TDi engine 'ramps' its power onto the shafts; and if you look at the TDi power curve, it has bog all torque or power at tickover, which ramps up HUGELY over a very short part of the initial rev range, then drops off like a stone..... consequently the 'thinking' is that its the rate of change of force that that particular power curve gives that puts a sledge hammer loading on the Series reletively 'fragile' drive line whenever load or acceleration is asked for; but when speed is wanted, the things have to rev thier nuts off to offer any motive force with it.
19J motor, isn't VERY much better to be honest, that high initial ramp, and rapid tail off of torque is a natural diesel trait, inherited from the old 2.25Na motor, but on that engine, the power it had was so pathetic it couldn't cause much harm, and to some degree the low rent development of the old 2.25 into the 2.5NAD and then the 2.5TD 19J motor meant that to save cost of re-engineering the motor they simply were inordinately concervative in 'tuning' it, which consequently gave it a LOT softer power delivery, along with lower numbers than could have been achieved (19J with bigger intercooler, and tweeked timing pump can make as much power as a TDi).... which means that its a LOT easier on series transmissions, and therfore a lot better suited (to my mind).
So there's some comfort in there for you, and solace that your 'gurus' aren't completely stringing you along or sellng you a 'pup'. They have just managed to avoid the fanatasim of cheap dead disco engines!
As for added capacity; works like this. 'Swept Volume' or 'Engine Displacement' is the volume of fluid displaced by the engine in one revolution, and basically the volume of one cylinder, multiplied by the number of cylinders.
Swept volume of a single cylinder is the cross sectional area of the 'bore' times the distance the piston moves, or the 'stroke' of the crank; so you get something that looks like this:
3.142 x Bore, all squared , divided by 4, times the stroke equals Cyl Capacity times number of cylinders, equals engine capacity.
Land Rover 2.5 four pot, has four 600+cc ish cylinders, with a bore dimension something around 3" or 75mm or so. 40 tho is about 1mm, which on a 75mm bore is barely 1.5% so on an engine of 2.5l is going to give you probably less than an extra 5cc of displaced capacity......
Its a second 'over-bore' size within standard service limits, not a performance 'over-bore'.... dont expect great shakes from it!
But, I would say, if you've had to over bore two sizes, its probably worth going for over sized pistons to take up that added clerance, rather than over sized piston rings on stock sized slugs, so that the rings dont see so much load; and given the question mark over original pistons to begin with, probably more worth the doing..... but I'll leave you to discuss that with whoever is building your engine.