I suppose that the most likely scenario for Iran-Contra to be bigger is that Oliver North's documents are discovered before they are destroyed. This will probably implicate Bush, as well as Reagan to a greater extent than he already was.
First off, the Democratic leadership in Congress was reluctant to push for impeachment. Many of them (Tip, Jim Wright) were around for Watergate and saw how it tore the nation apart. They were none too eager for a repeat performance. Impeachment probably won't happen, but there will be callings from the Democratic left to do so, and Reagan's approval ratings will fall.
The 1988 election will be much better for the Democrats. Bush will probably not run for the White House, and if he does will probably lose out to Bob Dole. The Democratic nomination may be slightly different, but Dukakis is still the likely winner given the conditions. Regardless, the Democrat will probably narrowly defeat Bob Dole for the White House. The Democrats will also cement their gains in Congress.
As for personal legacies, Bush and Reagan will be damaged. Reagan probably won't be the white knight among Republicans and conservatives that he is today. He will still be quite popular, but not to the same extent. Essentially, he wouldn't be the gold standard that all Republican presidential candidates would have to aspire towards. Bush's legacy will be permanently damaged. His role in the affair was far greater than known at the time, and like I said earlier I doubt that he would be the GOP's nominee in 1988. He will retire into obscurity, and his sons will be hard pressed to take any Governor's mansions.