Reasonable gains can be had, drop the jug so squish is down to .020, then raise the exhaust back up to stock and maybe a slight bit higher, but the more you raise it the more torque your trade in to get few more revs. Widen the exhaust and intake out leaving a safe margin of skirt to cover the ports. The bottom of the transfer duct can be cleaned up a little too. About 4 or 5 hours start to finish and you should expect a gain of 10% on the mild porting, and maybe another 15% to 20% for opening the muffler up. It should bump up compression 10 psi or so too.
To do more than that you need some way of getting in to work on the inside of the transfers, and along with some piston, head and carb work there is a fair bit more on the table in terms of HP gains.
Some of the sealers are pretty sticky and a real mess to work, esp if you plan to rework the saw in steps. I have had good success with permatex that can be found at most hardware stores, key is to have a good tight metal to metal fit and not depend on the sealer to fill voids.