I think the compressor is big enough for the occasional small job- but its not enough for continuous blasting.
I have a big 7 1/2Hp on a 120 gallon tank, and it runs continuously when I sandblast.
Changing the motor wont help- you need a bigger compressor, and a bigger tank, as the problem is not horsepower, its CFM.

A good place to look for ideas to copy, parts to buy, and theory of sizing, is the TIP website.
I bought their gun, pickup tube, gloves and vacuum, and built my own 1/8" plate sandblaster, and it works really well.
You are gonna need at the very least a shop vac- and that will destroy itself pretty quick. Much better, and of course, more money, is a real vac for sand, with a cloth bag and filters, so the sand doesnt all go thru your motor- it does wonders for bearings.
Dust fills your sandblaster quickly- especially if you are using sand- which I think is a crummy blasting medium anyway, but even worse because it breaks down so quickly into hazardous dust.
I use Star Blast, which is Staurolite from Dupont- much better medium, lasts a long time, and isnt too expensive.

http://www.tptools.com/