Stage I, Open up the venturi, scrap the muffler and run it on bladder with 7.5x6 props. Stage II would have you trim the piston skirt to unshroud one of the transfer ports [@ BDC], then grind a corresponding notch in the counterweight of the crank to unblock flow to this transfer port, then grind the closing side of the crank window to close at 60 degrees. While all this is going on, don't forget the friction that lots of contact with the crank bushing has.....you will want to cut a relief notch in the crank to minimize drag,[reduce contact area with the case] then polish the main journal so that the crank spins as freely as possible in the case. None of this is anything new, it's old C/L combat engine technique that was done before the Nelson engines came out RTF. Final power tweaking comes with trying out various deck heights to set the head at, the FP head should be opened up slightly to run higher nitro. Some combat flyers ran FP .40s as practice engines and they held up very well. The .25s were popular as well with RC combateers and they got a boost from running mousse can pipe exhausts.
An engine that is set up and propped like this should be able to pull 400-500 sq inches around on a clean plane pretty good. You can't get something from nothing, all else being equal the .32s will always have more potential for the same weight and size.