Are there any older AF steamers that can be updated or upgraded either with paint or added details to run on a scale layout? Sort of like how Lionel did the scale Hudson back in the '30s. I guess they would not have can motors correct? Is there any market for a better drivetrain?
Scale conversions for Gilbert Flyer locomotives has been pretty much relegated to the olden days.
As I recall,the "old" S Scale Locomotive and Supply company (a manufacturer of brass locomotive crafstman kits) had conversion drivers (or mechanism kit, I don't really remember) for the NYC Hudson. Another company called Nixon made drivers for the 0-8-0 and wheels for the diesels.
The "new" S Scale locomotive and Supply Co. is making some of the brass detail parts available again. The only Flyer conversion presently is for the Y3.
River Raisin also has some detail parts available:
S-N-S Trains makes can motor conversion kits for old Flyer:
The Hudsons, 0-8-0's, early Atlantics, K5 and Northerns were probably the best candidates for upgrades and conversions. The 393 and 21085 Pacifics were cruder by comparison, although i did see one 21085 converted to scale wheels some years ago.
Frank Titman used to take the Reading Atlantics and make all manner of Reading steam locomotives out of them, but that's also when the old SSL&S was still in full swing.
At the last S Fest, there was a K5 with outfitted with an American Models drive on display, so some folks are still scalifying old Flyer every now and then.
I'm not sure if there would be a viable market for Flyer steam conversion drives nowadays. The costs of development and manufacturing might be on the high side.