Thanks, I had generally thought of the balsa plug idea, but was concerned about CG changes as you mentioned. CG will already shift aft since I will be using lipo instead of NiMH batteries.
The brushless will not fit in the existing hole, I could probably do some carving, but mounting would have to be very rigid to avoid any flexure that would cause the outrunner to drag inside the hole.
The Prop for the brushless is 5.5" dia and will fit OK without modifications.
I saw one picture where the plug idea was used to provide a mount that actually raised the motor above the current housing. That was done mostly for a different brushless to swing a larger prop.

I am new to electrics, and just searching for ideas. Thanks again for the post.