It's basically just putting a radius on the lower edge, creating a "short side radius" instead of an almost 90 degree corner with a sharp edge. I try to come as close as I can to matching the radius of the "long" side at the top of the case's intake passage(s ).

Tools required are a Dremel, a nice 'n sharp cutting burr (I like the carbide cutters ) of 1/8" dia...either straight w/ a rounded end or "flame" shape...and a steady hand.

There are several threads around here on modifying engines...but unless you are prepared to possably damage the sleeve (one major whoops and [:@] ) and maybe have to scrap it...???
You mentioned something about working on 1:1 cars? Not knowing your background, I don't know if you have experience with a die grinder and porting/polishing cyl. heads, etc?

If you're curious, have a look in the r/c car engines forum for a modding thread...(I'll go have a look, and maybe put a link to it in here...)

Edit: I found it...
http://www.rcuniverse.com/forum/m_5226191/tm.htm
There are some pics that will give ya the general idea.