RE: What engine would you use ?
Put a 1.00 Saito in it, and use a large diameter, low pitch prop (16-4 Zinger comes to mind). It isn't a fast plane, no need to put a high winding engine in it. The 1.00 will spin a large diameter prop fast enough to let you putt-putt around and sound as good as you look. A .91 will work also, I used this size prop on a DR-I with a .91, but a 1.00 will give you a little more oomph.