Someone may come along with better suggestions because like I said I've been out of the nitro side of things for several years now but a couple of choices Id look at for a budget .28 to throw in it would either be the LRP .28 spec 4 or the Dynamite "Big Red" .28. That being said I've never used...
That I am unsure of. If it has the EZ start system still attached to it Id ditch that and put a pull start on it. It probably wouldnt need any modification but if your talking about putting it in the Losi Truggy Id buy a .28 and put in it. The 3.3 is to small imo.
You can use the 3.3 in other kits if you wish.
Losi and Kyosho are both good brands. Right now Id recommend the Losi but opnly because from what I keep hearing Kyosho parts are hard to find right now. A lot of the parts are supposedly back ordered.