Lionel 123 O Gauge curved tunnel

Super Nice Find!!!  Congrats!!!  Is that 123 or 923 for the model number?  There is a 923 on das bay at the moment.

this is a 123 as 923 would be its big standard gauge brother

Great piece. I love the old Pre-war scenery and tunnels.

As you probably know they were made of felt cloth soaked in plaster. I would try playing with some felt and plaster on a separate pallet like a piece of Luan until you get something that dries and looks like the right texture. Then play with some artist's oil colors from a squeeze tube to match what's there. Once your confident make an oversized felt plaster patch on the inside of the tunnel and kind of push it up into the hole so it comes level with the top.  Once that dries that should leave you with just a narrow crack around the patch that you can fill with plaster using the tip of your finger and then touch up with more oil paint.

That's how I would approach it, but it's just a suggestion.

A little update on my tunnel, wen to the fabric store for some supplies and just put a felt patch in and also discovered a good chunk of the hole folded over, waiting for the glue to dry.  I went with the black felt so it stands out as a repair , also found some pain that is very close, only will need to do minor touch up now, thanks for all of the suggestions, I also put a few patch on another Crack I saw on the inside, I'd rather be safe than sorry

I think you have 1022 tunnel.  It is the same as the 123 but without house or trees.