http://uo.stratics.com/content/skills/parrying.php
Pretty sure that's all you need.
In short, going over 70 parry will increase your chance to block even more. Cap is at 120 parry 120 bushido with 80 dexterity.
...and no you cannot raise dexterity and drop parry to compensate and get the same cap. If you do not have 80 dexterity, you will never get to block chance cap.
With all that being said, here is (imo) the best setup (currently what I run on Sadok)
120 Bushido
120 Parrying
120 Swordsmanship (or fencing, see below)
120 Tactics
100 Necromancy
100 Resisting Spells
80 Chivalry
Swordsmanship is good for damage, fencing is good for tanking. With swordsmanship, I use either a Bladed Staff (single target) or a Double Axe (multi target.)
Fencing I use to tank stuff that hits extremely hard (ie those captains from last city invasions.) Leaf blade is your friend with Armor Ignore and Feint as your two special attacks, coupled with your block chance from 120 Parry and 120 Bushido (35% 1-handed wep and no shield, with at least 80 dex.) Not to mention the Evasion spell which is based on Parry/Bushido/Anatomy. To top it off, you'll have 1 hand free to chug pots, it is by FAR the best tanking template in the game.
SUIT: easy to build with the loot now! One more thing, since you're bush/parry, you're going to want to use Counter Attack. If you use that, you'll want to parry more often. DCI is checked before block chance. So, you want as little DCI on your suit as possible (Corgul's Sash only.) This will help you parry more, which in turn will help you counter attack more - thus healing you more and do more damage of course.
Talisman: Conjurer's Trinket / Primer on Arms
Jewelry: You're going to need +skill on your jewelry to get you to meet those skill caps. Use the rest of the properties to get to your HCI, DI, EP caps. Do NOT waste space on jewelry for LMC or stats.
Head: Mace and Shield - no substitute. Preferably get a Blackthorne's version of the Mace and Shields so you can refine it (reinforced NOT deflecting.)
Waist: Crimson Cinture - no substitute.
Legs: Animated Legs of the Insane Tinker - no substitute.
Neck, Arms, Tunic, Gloves: Studded Leather or Bone only. 10 LMC on each piece, +12-15 Hit Points total needed, as much resists needed to get to cap (each piece reinforced to get to 75 cap) and as much Stamina and Mana as possible. Regens are not important as you will be healing with Vampiric Embrace, leeching mana from your weapon, and you won't lose much stamina when getting hit due to your armor being non-medable. Also you can cast Divine Fury to get stamina back as well as a short DPS boost.
Feet: Damage eater sandals.
Sash: Corgul's
Back: Ranger's cloak of Augmentation