First bike. Trying to get this thing going..

The extra distance from the rear axle that you gain by raising the engine up along the seat tube is using a lot of change in height for only a little bit extra distance from the rear axle. It isnt pulling the chain directly, moving the engine directly away from the wheel. Youre raising it loads, and making loads of room at the front that you have to fill, for only a small change in chain length.

Therefore I stick by the earlier suggested technique of getting pieces of any kind of flat plate and drilling two holes in the plate to match the rear stud spacing, to place flat plate/s onto the rear studs before adding the saddle clamp. Spacing the engine directly forward on its rear mount.
Then as Don said, the front can be made to fit your angles and the space that is left over can be filled by something stiff. There shouldn't have to be a lot really.

You can use the/an idler pulley to lift the chain over the chainstay if they're hitting...
 
Do you have a pic of this setup that I can use as reference?

Edit: NVM I get what you are saying. I thought it was more important to have the back end flush against the frame, but will try this
 
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UPDATE:
A quick refresher since you guys took over this thread lol 😉 ...So, originally I had the engine sitting at the bottom of the frame, then I hiked the back end of it up to get the needed tension on the chain. You guys kindly poined out that's not a good idea so I'm trying something different. I realized this bike has a longer frame than 'normal', and I need to sit the engine higher up on the frame for the engine to be square, and chain tight.

Before I go any further, what do you guys think about this set up?
View attachment 97656
I don't have any problem with the engine like that, the carb is level. You need a block between the motor and the bike frame at the front. I used a cryloc (spelling) block on a bike there once, worked great. It was easy to shape to the motor and frame and gave some vibration isolation.
 
I thought it was more important to have the back end flush against the frame, but will try this
It IS flush against the frame. It stays completely square to the seat tube. You're just spacing the engine directly forward perpendicular to the seat tube.
Moving it forward on the rear studs instead of tipping the rear studs over or sliding them up the seat tube. Everything will still be square at the rear; but you'll add a 1/4" of distance between sprockets with every 1/4" of flat plate (or anything incompressible and strong enough (at this point im not insisting its even bits of flat plate alloy) you stack onto the rear studs between the engine and the cast saddle mount. Raising the engine you were only adding a little more distance between sprockets for a big increase in height which made the huge gap in the front
 
Just wanted to thank all of you for your help. Still working on getting her perfect, but she's running pretty good. Couldnt have done it without u guys ✌😎
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