Here's the lowdown I got from UTB when I bought my bus. I don't take this to be law, but from the years of experience the guy has, it seems reasonable.
The bus cannot be NSBC or any other shade of yellow that might easily be confused. Also, all markings that say school bus or a district must be removed. He also recommended against putting something like "Cool Bus" on the panel between the 8 ways as this could be misconstrued from a distance.
The stop sign must be removed. In addition, the 8 ways may not function and must either be blacked out or covered up. He was unsure as to whether or not putting floodlights on the rear and driving lights on the ront was legal. He was also unsure if wiring them up so the rears were all read turn and brake signals and the fronts were all amber turn signals would be legal due to height and confusion.
Also, as long as the bus was still yellow (when I drove it home and for the time being), I need to stop at ALL railroad crossings in the state and put on my flashers. It is illegal for a vehicle that looks like a bus to blow by apparently. The fine is steep if a cop or railroad personal catch just you. If they think you endangered anyone else's life (passengers or otherwise) it quickly rises.
I think he was really just giving me a good heads up. I haven't had a problem yet, but I haven't driven much either. I have noticed people waving to me and smiling a lot as I pass them on the 2 lane backroads, especially in the morning and afternoon so I think that people still mistake it for being an actual school bus, nevermind the lack of 8 way lights or school bus markings. Basically....I don't want to tempt fate.