If you are going for sound, then go for a four cycle motor.

The 2cycle will work fine, but yes, you'll need an in-cowl muffler. Try slimline, they should have what your looking for on your 2 cycles.

Get as much speed as you can before you pull the airplane off the ground, use lots of runway. And do not fly it as you can most sport airplanes. Warbirds can be tricky at times, and putting them into spins, snaps, etc. can put them right into the ground (I speak from previous experience!).

Typical aerobatics for warbirds (loops, rolls, immelmans{sp?}, etc) are just fine, as well as just plain hauling *****.

I'm not certain if the muffler gives the engine more power or not. It may be determined by the engine. It does seem to me, however, that I've seen a slight increase in performance, and reliability, with them.