520 counter and final drive sprockets are readily available, not real expensive either, probably the same price as their 530 counterparts (no pun intended). The part most people forget is to space the 520 counter sprocket 1/16" off the transmission so that the chain run is true; the spacer is key; you might get away with grinding off an 1/8th from the inside of a 530 counter shaft sprocket and final drive sprocket, I can't say.
You can have the standard sprockets ground, but it is not as straight forward as knocking off a 1/16" on each side, there are at least two angles involved and a bit of judgment; new parts are manufactured, doesn't mean they are perfect, but means that the manufacturer has too much invested to make a poor set-up, so your chances of a V 1.0 fit are near 100%. Cutting down 530 parts may remove hardening, but I don't know enough about how they are made to say, but this forum, however, has plenty of members who know metallurgy and may chime in.
An X or O ring chain will out last several non sealed chains with less maintenance which means that you won't be replacing sprockets nearly as often, a virtual buy back There was some buzz about sealed chains eating more power, which makes sense, but you can most likely get tat power back by loosing 5 pounds of body weight, ' can't say.