Assuming your timer is the SS8, it looks like it has a lot of capability. I would not be surprised that the unit is warm. It probably uses a couple of watts of power itself. Your wall box may be plastic, which is a poor conductor of heat. If so, most of the heat dissipation has to come out through the front panel, and it will be warm to the touch.
Because the unit is rated for 15A, it must use a relay to switch the load. It shouldn't matter whether you have 120 watt load or a 1200 watt load. But if the unit does not use a latching relay, then there will be some additional temperature rise when the relay is actuated and the load is on.
The older motorized timers probably dissipate less power, but they certainly don't have the capability that the newer digital timers have.
There are a lot of components inside that switch, if it's similar to the one someone (was that you?) from Canada posted the PDF schematic link for a month or so ago. You're likely to find any such switch generates heat. There are a number of things you can do to dissipate the heat.
First, I'd measure the current temperature with a thermometer. I keep a < $10 Ratshack indoor/outdoor model with a plastic encapsulated probe for just such jobs. If you're in the northern hemisphere, you're likely to record the maximum temperature for such a device right about this time of year, which is excellent.
When you've got an idea of how hot it runs, with the wallplate on, preferably, then you know whether it's really a fire hazard (does it exceed its label rating?) and whether your modifications had an effect. Pull the switch and knock out any remaining knockouts you can from the wallbox (breakers OFF, please!) to assure good airflow around the switch. Remove, if you can, insulation above and below the switch and to the side away from the stud. In many new houses the wallboxes retain heat better than your kitchen oven!
Some wallboxes can be partially disassembled, even when still attached to a stud. If it's the only box or the box furthest from the stud, you may be able to mount a passive heatsink like the ones found on most PC's. Some lamp dimmers put out an alarming amount of heat, but are within code if the heat doesn't exceeding the rating that should be found somewhere on the switch body.
I'd measure the temp first, though, to find out whether you may have a duff unit that Intermatic would replace for free. They should at least be made aware that you're unhappy about the heat output. Being able to tell them it's running at 140F when it's only rated for 120F might stimulate a replacement unit from them, gratis.
Do you have any X-10 switches or any other non-mechanical switches? I ask because you may not be aware how much heat anything except a traditional mechanical flip switch can generate in a confined space. All these devices require a power supply to convert AC to DC at low voltage, and that means heat gets generated.
Oh, if you're not using one now, switching to a metal wallplate will help dissipate even more heat from the switch.
I'm just afraid if you switch to an X-10 switch, you'll see the same kind of heat problems.
Since this is for porch lights, it's probably in an exterior wall surrounded by insulation. So there will be virtually no dissipation inside the wall. Any heat must come out through the front. The metal wall plate suggested by another poster may be the best that can be done easily.
When we had this house built, I specified that all wall boxes that might be used for X10 switches would be metal. I never noticed any warm wall plates. But then most lights that switch on automatically at night are compact fluorescents controlled by relay wall switches. So the dissipation is minimal.
I got one of these for my outdoor light and one for an indoor light. Have one for Christmas lights too that is rated for higher amps. It was one of the greatest finds I have found for my house in a long time.