I'de plug the hole with Bamboo dowel and drill a new hole. Bamboo is tough wood, but it sands really nice. It's also a little compressable, so if the hole is too small you can just turn the dowel and it twists itself in like a scerw.

The evolution 46 engine in the Pulse runs just fine upright. However, if you want to get the engine and muffler rotated down so they don't spoil the plane's beautiful lines, that's another story. I'm building an electric just so the motor won't stick out.