Bill:
I pulled out the plans of my kit and laid my new OS 46 FX over them. While it would fill the space, it appears that my .46 would fit, so I envision that your .40 would fit also. However, the kit recommends a .19 to a .35 - and that was back in the weak engine era of the early 60's- so I wonder if your more modern .40 might not be too much horsepower for this little airplane. I have a couple of OS 20 four strokes that would probably do a good job of fitting in the little airplane, but I would be afraid that their horsepower would not be as high as the .19 minimum recommended by the kit. They were good R/C free flight motors. I do have a couple of OS 32 abc's also but they are screamers and, again, might overpower the airframe.
I have never owned the OS 40 LA, so I am unfamiliar with its performance. But if you intend to use it with a throttle, maybe its operating parameters are within the .19 to .35 engine range recommended by the kit. If it is tight due to the wood construction, maybe you could pull a fiberglass cowl to gain more interior room. Don't give up on it. Good luck.
Jim Fruit