As far as a motorswap... for sure more displacement will help and the 2v monster motors should all fit. even the SSS motors of the 796/1100 will fit.
the bore i think can go up to 91 or 92 from the stock 88. but likely you'll have to have custom pistons made. then bore and replate the cyl. the 800HC pistons will have a lower deck height so would lower the compression or keep it the same at least. they are made for a 8.8mm longer stroke but they are the same bore. so they would be a good start for a custom piston.
you'll have to go through someone like
www.ducshop.comBut if you want to keep it a 696 and make it the best damn 696...
I spoke to a very well known Ducati race engine builder and he told me the head on the 696 is a very good head. the valves are the largest that would flow well. just clean up the ports, do a 3 angle valve job, replace the valve guides with a better material. clean up the combustion chamber a bit.
lightening the internals of the motor will allow you to hit the powerband of the 696 faster, >6000k rpm. this is why the DP ECU or a remap of somesort that will bump the RPM limiter up so you won't have such a narrow powerband.
and lightening the wheels/brakes and improved suspension will really improve the feel of the bike in corners etc.
also, something as simple as a quick cam throttlebody cam will give you a better feel getting to the powerband.