I had a very similiar idea with a few small production changes but would have had the same use. Would this patent stop me from legally producing a similiar item and what are the legal consequences? I dont want to dump a lot of money into anything I can lose if they take a patent back or for an item that is no longer patentable?
You have two questions: Will you get in trouble if you make and sell a particular handle extender, and can you patent an improvement on an already known handle extenter.
The questions are not as tied together as you might think. As you noticed, US7032911 has gone abandoned for lack of paying maintance fees. A patentee can petition to have a patent revived by claiming the missed payment was either unintentional or unavoidable. Unavoidable is very hard to prove and unintentional does not fly at all after two years. This one is close to two years right now. As a patent no longer in force, this patent can't be used against you. But the thing you plan to make might very well infringe some other patent that is still in force.
Improvements to known things can be granted a patent if the improvement is new and non-obvious. What that amounts to is very specific to the details.