The Audi 4.2 weights 467lbs, the ls7 weights 458lbs. I'm not sure if your right about the dimensions, I've seen that audi block sitting in a garage before and I thought it was a V6. I bet the Audi is taller but it's much shorter. One is good for low center of gravity, the other is better for interior room. Displacement matters because of fuel economy, and why use a 5L engine if you can get the same out of a 3L?
Well you can't go by hp/L when there is a turbo involved, that just doesn't work.
The other thing is, the Audi is AWD, it has about 25% drivetrain loss, where the z06 has about 12%. So if it was a 2WD car it would be well into the 600whp range.
I'm just glad they finally decided to put the V10 in the R8, 420hp is weak for a car as badass looking as that.