There was no airflow from the registers which turned out to be blown capacitors on the ECM unit for the furnace motor. Repair estimate $1200 as the ECM is no longer available without replacing the motor.
Considering the cost, I would be very tempted to try and repair the module - you have nothing to lose, would need a soldering iron and caps.
There's a current limiting thermister that can burn out if the ducts are undersized for the blower and it also replaceable - it should be checked.
I do find it very difficult to believe that the module alone isn't available. Call around and also see if the part is available online. The programming does have to match the furnace model though, not all parts with the same number will work.
Bad contractors will claim parts are not available to push you to replace - they make a lot more money on replacement than repair. The entire furnace at cost can be $1500 (maybe $2000 including materials) but a contractor will sell it for $4000 to $6000 installed.
As far as replacement goes, I think its a waste.
But if you insist, sizing needs to be considered. Where are you located?
125k btu is huge, even for a house of this size. A load calculation should be done and may reveal you only need 80k btu.
Modern houses have fairly low heat loss, heck even 1980s houses of this size in ontario used to heat on 100-110k low efficiency furnaces that have a rated output of 70 to 80k. 125k input at 96% has a rated output of 120 000 btu/hr -> huge!
Now if you're in a colder part of the country, you may actually need the BTUs of a larger unit.
You do not need to replace the a/c - a unit from 2007 is at least 13 seer which is pretty decent.
Even if you were to replace, there's little value in getting anything above 14 seer (which turns into 15-16 with an ecm equipped furnace) in canada.
To justify the XC21, you better be in the southern US.
Keep in mind, higher end units cost more to fix.
For a/c units, most 2 stage and variable machines have an expensive circuit board and ecm motor in the outdoor unit. The airflow is lower on low and cold air doesn't rise, so a 2-speed or variable capacity a/c can actually increase temperature differences between floors.
For furnaces, modulating uses a variable speed venter motor and the circuit board, a modulating gas valve. Repair costs will add up very fast out of warranty. Also, you have to use a very expensive communicating thermostat to take full advantage of the modulator. Think $500.
I think 2-stage, properly sized and controlled by generic 2-stage thermostat is the sweet spot, the best compromise between comfort and repair costs.
2-stage is available two ecm blower motor types - x13 and full variable speed. The x13 can be replaced with a generic ecm out of warranty, the fully featured variable speed automatically adjusts itself to get proper airflow as duct pressure changes, but is totally proprietary.
Mod is only available with variable speed.
Lennox PC03S-16-16 - Pure Air System (Merv 16)
You don't need this unless you have severe allergies.
A MERV 8 media filter is good enough, its only there to keep the furnace and coil clean.