You can use a pipe cutter that accommodates 1" tubes to cut your frame. They're pretty cheap too. Look in the plumbing section of your home center, they resemble a C and have a cutting wheel in one side, and rollers on the other. The tubes are very thin so cutting through is quick and easy.
You could buy one of 754's kits and avoid needing to weld it up.
VHT engine paint seems to pretty popular. You can paint while installed, just be hyper diligent about cleaning, degreasing, and prepping the surface and taping off what you don't want painted. Heat during can be accomplished with a DIY hot box and heat gun. Take some cardboard, foil line the interiors, then fashion a large, somewhat ugly contraption around your motor, it doesn't have to be perfect and blow your heat in. But curing isn't required, just helpful.
I've bought complete engine gasket kits for like $60 so I wouldn't worry about the added expense of the head gasket. You never know when an extra gasket will come in handy...