klipschorn modifications

Wouldn't lining the horns narrow their geometry (or is that part of what's good?)? Any benefit from lining the outsides of the horns for damping?

You line the horns on the outside, not the inside. You can use Dynamat, or you can get much cheaper alternatives at Parts Express. The Parts Express stuff is a bit easier to apply.

Metal horn damping can be cheaply, and very effectively accomplished with any brand of plumber's putty, or Mortite (http://herbiesaudiolab.home.att.net/rope.htm) which is configured in a way that makes it VERY easy to use. Inexpensively obtained at most hardware stores. Be certain to buy the non-hardening variety of plumber's putty if you go that route. The stuff is extemely dense and sticky, making it easy to apply to the outside of the horn. The stamped steel woofer frame is another source of coloration on these speakers, being a low dollar Eminence. Do the same to it. By all means address the x-over. Open air-core inductors won't saturate like the iron-cored in there, and metalized mylar caps are much more transparent than oil filled.

Regarding the Beyma CP25 drop in, it looks like that tweeter is much larger than the one in the Klipschorn. Do you mean replace the compression driver and leave the horn structure in place or do you have to place the driver and horn outside of the cabinet?

Yes, the CP25 is a "drop-in" in terms of its output (no padding necessary, just wire it up and play using the same crossover). Physically it is larger and must be located on top of the cabinet, or an adaptation to the cabinet needs to be created. I used a Fane tweet and located it on top of the cabinet. It worked GREAT! Big improvement over stock. The two horns do not depend upon the cabinet for sound (just support and position). Having the tweet slightly higher did not create a handicap in my experience.