Looked at in the simple, overall sense, it is rather intuitive, and correct, that the drag is proportional to air density, which is inversely proportional to the temperature. And, power would be considered proportional to air density, which is inversely proportional to temperature. So, a change in temperature would affect both, proportionally.
However, to produce power, what is really important is the mass flow rate, not just the air density. Mass flow rate is the product of the density and the volumetric efficiency. It turns out that the volumetric efficiency has been shown to vary approximately as the square root of the temperature which, when multiplied by the air density (being inversely proportional to temperature), results in a mass flow rate that is inversely proportional to the square root of the temperature, as Hotrod stated. This, in effect, says the volumetric efficiency increases slightly with temperature and makes the power loss due to increased temperature less severe than the directly proportional loss of the simpler concept using air density alone. It is, however, a small effect--the calculated loss of horsepower in the Midget example is only 1.17 hp. This also assumes that the cooling due to fuel evaporation is the same in both cases.
Conversely, the gain in horsepower in going from 75F to 60F of 1.22 would result in a speed of 114.45 as the drag overcomes the power gain.
Again, this is an academic treatment concerning temperature alone, and as is the case with the Midget, obviously there are other, larger effects taking place somewhere/somehow. The point of the exercise was to estimate how significant the temperature change alone might be.
NOTE: Due to a misplaced parenthesis in the worksheet where the calculations were made, the 116.6 mph figure in my previous reply should be 115.5 mph.