Hi John,
Good choice on the Magnum, I had to laugh when guys were suggesting the 400 dollar Jett for you budget project!!!

OS 55 AX Light, easy to run with good power, it'll turn an 11x7 prop with ease with the included muffler; 170 bucks.
http://www3.towerhobbies.com/cgi-bin...?&I=LXNMD1

Magnum 61, slightly larger and heavier than the OS 55 AX (made on .46 case), this is easy to run and makes more power with included muffler and an 11x7 than the 55. Cheaper, almost as east to set up; 120 bucks.
http://www.hobbypeople.net/index.php...ngine-rnv.html

These two engines I have experience with and own and run in two of my models. I wouldn't waste any time or money on aftermarket mufflers because the manufacture's mufflers are tuned already, they both haul. You may be able to find them cheaper at some other online outlets or at a local hobby shop, swap meet, etc, but a new one with your Tower discount will make it easy. Both of them run well on about any fuel, like Omega. Gary can get you pointed the right direction and may have done so already, but these are my recommendations.

Chris...