I'm pretty sure the Saladin could take a way bigger gun, given the gun:weight ratios of some of the French armoured cars. The GIAT 90mm medium velocity gun from the AML-90 should be a shoe-in, as should the Belgian Cockerill. Another interesting one would be the Israeli 60mm HVMS gun as used in Chilean Shermans, Chaffees and Piranhas.
The other obvious mod would be a modern diesel engine, in fact I think I'm right in saying such a conversion was available.
To begin with, what about one with the turret and 30 mm L21 RARDEN cannon from the FV721 Fox:
If you offer up a Scorpion/Scimitar/Fox turret to a Saladin hull it looks lost: just too small. However putting a RARDEN into the original Saladin turret would be perfectly feasible and make a lot of sense, since the Fox turned out to have some mobility issues due to being too top heavy.
The Airfix 1/76th Scorpion kit comes with an optional RARDEN too, so it would be really easy to do this with the ex-JB Saladin.