Hi sscherin,
The intake is a reed valve which is opened and closed by crankcase pressure, so lowering the cylinder won't effect intake timing. The exhust and tranfer ports will be slightly retarded. The stock timing is about 75 degrees before bottom dead center (BBDC) for the exhust and 58 degrees BBDC for the trasnsfers. This is the same as the stock Homelite 25/30cc engines which are great performers. The newer rods are beefier then thw ones used on the older engines. Many people have lowered the cylinder to get a boost in power successfully. A larger carb and free breathing exhust will help. Take it one step at a time, checking results as you go.

Dave