No, you can't be sued for modifying a public domain work (unless you copy someone else's modifications to the same work). And yes, a greatly modified public domain work would be a new (or "derivative") work that is subject to copyright protection.
To explain the principle, law professors often use as an example the most famous modified PD work, Marcel Duchamp's L.H.O.O.Q., commonly known as Mona Lisa with a Mustache. (L.H.O.O.Q. is a vulgar French acronym implying that a woman has a hot derriere.). Duchamp's estate can stop others from reproducing his work (at least in France where it is still protected) but they cannot stop others from adding their own unique modifications to DaVinci's painting. As the Copyright Office explains:
A work that has fallen into the public domain, that is, a work that is no longer protected by copyright, is also an underlying “work” from which derivative authorship may be added, but the copyright in the derivative work will not extend to the public domain material, and the use of the public domain material in a derivative work will not prevent anyone else from using the same public domain work for another derivative work.Similarly, you can stop others from copying your expanded plot, and other unique additions and modifications. You cannot, however, stop others from adopting or modifying the same public domain story (unless they copy your modifications). Examples of how this is managed can be seen in the many adaptations of Sherlock Holmes (the original works are almost all PD) in print, on television, and in the movies.