Since all my shifter bikes are internal hubs I haven't needed a guide for the inner gear at the cranks. However alignment was touchy and needed to be dead on requiring some extra attention to the spacing of the inner and outer gears. Yours with a cassette will need the front shifting mech as a guide. Sounds like your well on the way to getting it to work. You may in the future need to upgrade your rear derailluer as they take quite a pounding, but might as well get the use out of the one you have for now. The prob with mag wheels in your build is they are not able to be dished to 1 side allowing them to ride center with a multi speed cassette.
35:1 didn't pop wheelies enough? I've loved my setup with the nexus 3 speed for a couple years now. Have 2 more nexus 3 speed hubs in case something bad happens, but it's all good so far. I use kmc 710 from the transfer case output to the chainring then kmc 510hx from the chainring to the rear wheel.
You can always make a custom 4 speed cassette and delete the gears you don't use. Just space the big gears out some so they are on the outside of the big section then put the smaller gears on the inside of the small section of the cassette. Use spacers on the inside and outside of the cluster. Then tune the derailleur to not go past either extreme. Tune your shifter based on first.
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