If it truely is a higher capacity machine, with the hp you have, you may not realize the baler's potential. I've got the same deal with the JD348 I bought - we'll see how it goes.
One thing for sure - if you're running an old baler, IMHO, there needs to be a backup plan and mine is a second baler.
If the baler is breaking flywheel shear pins right and left, it sounds like the needles are on the ragged edge of being out of time with the plunger or the needle carriage is bouncing up the needles into the bale chamber. Either will cause the plunger stop to do its thing and when it stops the plunger, the flywheel shear bolt shears. Both are easy fixes.
I also had some trouble early on with shearing the flywheel shear bolt and I attributed some of that to not running the baler at full 540 rpms and with it realizing the mass/energy stored in the flywheel. Since running it at 540 rpms, we have not broke a shear pin again.
A few thoughts about capacity.....
The 68 is a 63-65 strokes per minute machine. If on a continuous run, eating hay and 12 strokes per bale, that's 5 bales per minute. Multiply that by 60 minutes and you're making 300 bales per hour. Realistically, after turning, etc., 200 bales per hour is a reasonable number on the high end for a 68. The capacity limit for us is how fast my stackers can stack the wagon off the back of the baler. My boys are much better now than when we started, but it wasn't hard to bury them if I kicked the tractor up a gear. If you're baling on the ground, different story.
Quality of the bale. My experience with the 68 is that more flakes, the better the bale "looks", i.e. cut side, brick shape, consistent length. When we started, we were making 8-9-8 flakes per bale. They were ragged and varied in length as the thicker the flake, depending on where the star wheel and trip arm when that last flake comes through, a 36 inch bale could be 41 inches. We downshifted and try to get 15 flakes per bale with the 68 now. With the 93 strokes per bale of the JD348, our capacity will increase with the same 15 strokes per bale without compromising the "looks"of the bale. Remember we sell all of our hay, so "looks" is very important. If the 278 you're looking at has higher strokes - you would see the same results.
First thing I looked at when considering a second baler was strokes per bale for capacity. I've got a 68, a neighbor has a New Holland 273 that is probably 25 years newer. He doesn't bale any faster than the 68 as the 273 is a 65 stroke per minute baler too. Balers I considered were ones like the JD336 or New Holland 565, 315 and 316 which are at 79/80 strokes per minute. The JD348, New Holland 570/575 are 93 strokes per minute. I'd have bought any of those balers if the deal was right. The 348 happened to be the first one I came across and bought it.
You read all kinds of posts about how balers, be it John Deere or New Holland do this or that badly, like irregular bale length or banana bales, but IMHO, if the baler is properly repaired/adjusted, fed right and operated at correct rpms/ground speed, all of them can pound out bricks.
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