I would say that a 40 in that plane is not nearly enough. I have the 1/5 scale kit and am going to put a 90 in it. My suggestion would be a decent 60-61. As far as hanging the muffler in the breeze. If you can live with the looks go ahaead. i would side mount the engine. I believe the head will stick out. If so this would allow good cooling for the engine. I would also install a good pitts style muffler designed for the engine. You will also still need the airflow to cool the muffler inside the cowel. Good luck and I hope you enjoy the kit.

Mark Shuman