I don't have much experience with engraved guns but have been watching a few and trying to learn form the experts; RKmesa being at the top of that list. What I think I've learned so far is that the value of an engraved gun depends very much on who engraved it and who wants it. The market isn't nearly as broad for engraved guns as non-engraved but it seems there are quite a few folks who like them.
The pieces I've seen that bring the highest prices are by known S&W factory engravers but a letter will not generally tell you who engraved it as the factory did not (most of the time anyway) allow the engravers to mark their work. So if yours is confirmed as factory engraved but was outsourced to Italy, the letter will probably not tell you that; only that it was Class A, B, or C engraved. A gun that is collectible by itself but with nice engraving, even if the engraver is unknown, will bring a good price too. A 3.5 inch Reg. Mag. engraver unknown sold for almost $10k on GB last night.
For recent price on a comparable piece you might look at GB item number 941569035. This is a Model 19 but likely an example of Italian engraving. I would guess yours as an N frame and with the letter you plan to get would sell for more, maybe in the $3k +/- range. If your gun was confirmed to have been done by Russell Smith or one of the other well known factory engravers and had an inlay or two it might sell for two or three times my $3k estimate.
As to where to sell, the large auction sites will get you the best top price but after fees, maybe not more than you could get here on the Classified side of the Forum. Good luck.
Jeff
SWCA #1457