R1 engine swap

[Falcon 269]

Or did Yamaha more or less do that and then called it the Gen 2? Which didn't sell as well and hasn't the same reputation as the Gen 1 for rideablity...

Not the same because the character of the Gen 2 engine is that of the 2006 R1 (might be a bit earlier), not the brilliant carb'ed original.  The 98/99 R1 has more grunt everywhere than the Gen 1 Fazer despite Yamaha saying the latter was 'retuned for more torque'. 

A 4XV R1 motor in a Gen 2 frame ... now that's an idea!