Here's a Lanc in about the size you want and done in foam. http://www.rcgroups.com/forums/showthread.php?t=1550827
I can recommend this motor for a 7" prop http://www.rctimer.com/index.php?gOo...0&productname=
Inexpensive, runs quietly, and is robustly made for it's size. 12-18A, 18 to 25 oz. of thrust on 3S. Very efficient with a 7x3 on a Bixler and fast on my Polaris with a 7x6. The motor doesn't even get warm with either setup. You could probably use GWS 7x4x3 which are available in CR styles. Probably overpowered for only 1.2M but you would definitely be able to hand launch it!
Of course, that means 4 ESCs, but you might want differential throttle anyway.
I agree with Bill, four brushed motors with gear boxes would sound pretty cool.
I think you could get away with 3mm wing skins. The scale airfoil is thick enough for a decent spar.