The board lists that it supports up to the Intel® Xeon™ E5450. This processor and all of the other processors listed have a TDP of 80w which is the cooling based on the case and the HSF (heatsink/fan). However the chipset on the board the Intel 5400 chipset does support the Intel Xeon X5460 but it is possible that HP has disable support for 120w TDP processors in the Bios. So without access to to test it out I can give you no other answer than maybe it will work in a new case with a better HSF.
I am in fact already moving it into a HAF X case and putting another HSF on it. After posting my original post and repost I have found listings from enthusiast selling the xw6600 with x2 xeon x5460. Which is exactly what I wanted to do, that and fill out the 32gb of ram. But thank you for your suggestions, I am ordering an 1100watt power supply and a geforce gtx 560 to, do you think thats a sufficient power supply?