Well, the gastank might need a bit of relocation, for fuel to get to the carb you'll need to use a pump or old fashioned gravity, gravity tends to require the tank being mounted above the carb bowl.
I've seen many beach cruisers with enough room for a 2 stroke and a 4 all under the same top tube at the same time, if you still want to do this then go ahead, no problem with it and you'll evade the pedal issue, mind you the higher up you place the engine the better the bike will fall over since the center of gravity will probably outreach what the kickstand can perch.
You'll still have a hot engine between your legs, about 6 inches higher than normal, less a steel tube to help keep your nuts off it, certainly more people would have done this if it didn't make us all so nervous...