I think that this whole thing comes down to a tuned exhaust.
By playing around with the exhaust and changing the phase of the exhaust wave you can do two things...
One reduce the back pressure of the exhaust allowing the hot gas out of the engine.
Two by changing the phase of the reflected wave scavenge more exhaust out of the cylinder allowing more fresh charge into the engine.
Save yourself a lot of hassle and buy a Jett muffler, it will boost the performance of your engine.
Another thing you can do is try a tuned pipe type of exhaust like those the control line stunt guys use.
As far as porting you engine itself it's a lot of work and you need special equipment, and you will have to strip the nickle and re-apply it to the entire engine.

Now on a positive note you can gain a lot just by using a better exhaust setup on the stock motor.
Also you can play around with the prop and anything on the plane that can or will produce drag, such as sealing the control surface gaps, or fairings on the control linkages.
Using the right spinner/prop combo as well as wheel pants and thinner wheels also can help you squeeze out some more performance, without buying a $350, engine as well.