a high compression piston and a cam should wake things up, along with a decent carb and an agressive porting job. Modern 250 (stock) motors put down mid to high 30's for horsepower.
CR85 is 2 stroke. I bought a CR85 with a motor that is in-pieces for next to nothing. I'm not interested in a 2-stroke bike, hence the conversion
Can the motor be squeezed in? Hopefully yes, one way or another. Guys have been doing it with CRF150 motors and old honda SL200 motors, the 200cc OHC Lifan should fit. Note the use of the word... 'should'