Amish,
Those seam like good mods you have in mind,

I think you need to keep in mind also, the in 1965 K&B .35 were high performance engine, they most likely had the same horsepower as any newer .25s on 10% nitro. I'm think the designer problem getting it on step didn't come from the long narrow fuse, but from the gutless engines. you ever run any old K&Bs? Do .25 deisels have more power than nitro .35s? I've never plyed with deisels.

Anyway, I bet if you put a couple modern .35s or .40s that plan would jumb right up on step.

Also It's hard to tell from the picture, but does the plane have any positive incedence built into the firewalls? a couple degrees will help get it up on step as well.

Good luck with the project. I dig those vintage designs