If it looks bad in its current condition and you do a good job of removing all of the factory paint from the parts you work on, and either do a good job of polishing them or recoating them, then I think you would only increase the value to most prospective buyers. Of course there are those who would prefer an unmolested original, but the value of bling tends to sway more people.
Keep in mind, however, that there is a lot of labor involved in doing a good job on something like this. Especially if you go the route of polishing over repainting. The route with the best outcome-to-labor-involved ratio, IMO, is to repaint the engine (which was painted from the factory) and polish the forks.
