Pax, your interpretation of Pius XII's statement clearly states that a heretic (a non-Catholic) can be (validly?) elected to the papacy. Is this what you believe?
I would disagree that a heretic is necessarily a non-catholic because there are various degrees of heresy. That's an over-generalization. But whatever...
Aside from that, yes, Pius XII took away all church penalties (i.e. canon law) so that heretics/excommunicants can take part in elections. It follows, logically, that if they can take part in the elections, then they could also be elected. You would ask, how is this possible? It's possible if you separate the papacy's powers into divine and human powers.
Much like the mass is part divine origin and part human, where the Church can change the human aspects of the prayers and certain, non-essential rubrics, so the papacy and church is part divine and part human. If it were not so, then Christ could not have given to St Peter the keys to "bind and loose." We all know that the pope cannot change anything of divine origin (i.e. he cannot change the sacraments, or the consecration), therefore he can "bind and loose" only what is human.
Pius XII changed the human rules so that heretics/excommunicants could take part in elections. We know that a heretic is in the state of sin, and they do not hold the full faith, therefore they would be barred from the spiritual/divine powers of the papacy. But the human powers of governing, jurisdiction over diocese and running of the church (which is referred to the MATERIAL office) could still be held by a heretic, since these powers are able to be "bound and loosed" by the pope - and Pius XII "loosed" them, whether we like it or not.
Do you understand the limits of one who just has the MATERIAL office of the pope? It's a HUGE limit. The pope is basically a glorified paper pusher; a CEO of the vatican's charities and bank - that's it. Neither I, nor Fr Chazal, nor any other of the many theologians who argue for this opinion are saying that a heretic pope is a good thing...we're saying he's basically meaningless. He's spiritually impotent. He's a spiritual sword made of a balloon. All the material office is concerned with is running the earthly matters of the vatican - payroll, paying bills, appointing new bishops when old ones die, etc.
Everything else related to the spiritual governance is OFF LIMITS to him; should be ignored; should be cast away. I don't get why we can't agree on this? I don't get why you can't see what Fr Chazal is saying?