Having done a bunch of these saws, I'll throw in a few comments. First, a muff mod is a very important thing to do. Especially if upsizing the engine. The muffler does not need any work on the baffle in my opinion, that's not a restriction point. I agree that drilling out the depressed area of the muffler does add a lot of noise but I make two 3/8" holes in it anyway but do most of the drilling outside the depression. As far as the engines, I have had very good success with the Farmertec kits (sold by Huztl, Machinesdoctor and others) I suggest to not use the aftermarket fuel lines on this model saw. The impulse lines and all the other rubber products are fine. In most cases the carb limiters will need to be trimmed to allow proper tuning. It is very important to pressure/vacuum test the engine assembly before reinstalling it into the chassis. They tend to leak and I've had to redo a few. Some leak through the bolt holes...
When disassembling, use ice cube trays or egg cartons to put parts in as you disassemble. (If you think that's an unnecessary step then you either don't know what you're getting into or you've done 10 of these saws.)
The 1127 series saw is a good seller so they are worthwhile to fix and flip. They aren't "easy" and are labor intensive so they're not feasible to get fixed by a shop. I've used these saws a lot to cut wood since I'm always testing one it seems.