I may try a higher gear ratio say 11 or 12 tooth pinion, and cut some more off the blades. The motor seems to be in its sweet spot at the moment.
You must be right about the head speed, your blades are quite a bit smaller than mine. Did you cut any off the lenght, is there any danger of too thin a blade flapping or flattening out at a high speed?
The battery im using is a 600mah. I have a home made li/ion thats about 105g and it really is stable with that, but obviously I prefer the lighter weight one and im going to get the head speed up to suit that battery.
I may go brushless but at the moment this motor seems to have enough power.

This is my heavy li/ion battery next to the lipo.