I can't comment on "replacing the guts". Seems like it ought to be okay,
but I don't actually know. A subpanel might make more sense anyhow.

You haven't said what your breaker box was, but they make quad breakers for
mine. That gives you two 240v circuits in the place of one. Have you
exhausted that route already?

You can alway put the work shop circuit in place of the dryer, and allow the
new owner the choice of which he wants to use it for. I can't see anyone
objecting to that.

I doubt you are getting 125a now; but that wouldn't matter unless you happen
to know you are right on the edge now and adding the new circuit will put
you over. At worst, you maybe couldn't use the table saw when the oven and
air conditioner are also in use; rarely a big deal.