I'm not sure an extension to Epsilon's accommodation block would be that straight forward to achieve. The problem with upping her passenger capacity is of course that that module is smaller than on her part sisters to start with. Adequate space would need to retained at the top of the fixed ramp for vehicles to manoeuvre for a start - the recess could be filled in but would it be enough? Particularly with operators choosing to operate visentinis with a reduced passenger certificate already. More facilities on deck 8 (by converting cabins) is more or less ruled out by the lack of lift access on the visentinis to the upper decks as well. She could certainly be made much more comfortable as a long term solution for the French route, IF only need to look at Stena's Birkenhead operation to see so, but if anything that would further reduce her passenger capacity. She'd also be a lot more economical to run year round than Oscar, but I wouldn't be surprised to see her returned at some stage, with perhaps one of her larger (passenger facilities wise) part-sisters acquired instead for the French run. It would certainly be cheaper than heavily modifying Epsilon to what would effectively be a similar specification. Epsilon is compatible with Pembroke dock, but I understand she is far from ideal berthing there. Something to do with manoeuvring and navigating to the berth from memory - she is quite long after all, but perhaps this could be rectified.
A new build, particularly at a European yard, is going to both cost a fortune and also be delayed for several years - they are all very busy building cruise ships these days. DSME were a very real option examined by P&O for the spirits. The Asian yards have come a long way over recent years building passenger ships, so I wouldn't rule them out totally for any potential new building, particularly given the lack of yard space in Europe for larger ships. Mind you, as I said over on the BF forum, Brodosplit is one European yard which may be available which also has fairly recent ferry building experience - though I understand they take on a lot of subcontracted work from Fincantieri, due to how busy they are. There's also the possibility of building and fitting out being split between 2 yards as well I suppose.
Whether a new build would be copy of Ulysees with different engines, I'm not so sure. Certainly she could form the basis of the design, but I'm sure there are many tweaks which could be implemented using the knowledge of years of operating her. There have also been advances in hull design since she was built, so a straight copy with a different power plant could be a missed opportunity.
I agree with IFPete that we will perhaps find out more in the interim results (or if nothing else, confirmation of Epsilon's charter extension). What I would say is, any extension would effectively rule out modifying her for that period, unless major changes have been negotiated to the charter agreement (which I doubt).