So to summarise so far, there is still a need for 125mph capable diesel-powered intercity trains, particularly on the XC network which has perennial capacity problems, for several years at least. But the obvious candidates - the 22X fleets coming free from other operators, are expensive to operate and much in need of a mid-life refurbishment.
Would reforming and lengthening the Class 220s improve their economics? Given the Class 220 carriage designations (A, C, D, F) it seems that 6-car formations were planned to be an option. So how about turning the 34no. 4-car sets into 17no. 6 cars and scrap 34 inefficient end carriages. That increases seat capacity from 200 to 332 (66% uplift), not considering internal refurbishment to remove the inefficient toilets which could add perhaps 30-40 more seats. You could also consider removing the engines from 1 or 2 of the cars to further improve efficiency.
Bring in the 20no. Avanti 221s to maintain the overall number of XC sets. Then possibly add the 222s - again, perhaps reform to 6 carriages to give 22no. standard sets and scrap a few end cars.
This gives XC a fleet of refurbished trains with a capacity of getting on for 400 seats, nearly double the current class 220, which can operate with the same number of staff at present with less fuel consumption. There's less requirement to double up trains, but if needed XC could move a huge number of people and probably offer some decent advance fares for a change.