Nothing wrong with the engine that's in there. I've built and raced many 4-valve Yamahas. The old XT600/SRX-6/TT600 engines can be built pretty easily to put out ~65 rear wheel HP and still be totally reliable. They just have to be built properly, and you have to keep the revs down below ~8500rpm. The last engine I built, my "b" engine is still alive somewhere. I put 3 seasons of racing on it as I recall, not even a hiccup. I'm sure Russ' builder did a good job with this one...
If you want more than 65HP to go with your 265# chassis, the electric start version of the XT600 will swap right in. That engine can put out 70-80 HP and be even more reliable that the older kick-start versions...
If that's still not enough, the 5-valve 660 Yamahas engines can be built to put out 90+ HP, but your talking many thousands to build that one...
Only advantage to a newer 450-based engine IMHO is weight. Just go on a diet, or get some skinny fkr to race your bike...;p
Good luck with the sale Russ!