First make sure the engine is positioned where you want it. I put it as far forward as possible, which leaves the front of the cylinder about 1/4" away from the frame. About at this point the bottom of the engine hits the frame by the pegs, so you may need to grind down one of the tube welds a bit. This gives the most room for the carb, and allows the coolant ports in the head to fall into this nice little pocket in the tank. Surprisingly, tilting the engine forward makes the pipe interfere less with the front wheel. It is probably a good idea to have your head-stay mounts made before doing this, to make sure they will work with the engine position that you end up with. (I will post CAD drawings and images of the head stay mount shortly). But note that the head stay mounts will allow for a good bit of movement in the forward/backward tilt of the engine when they are not tightened down, so don't count on them to get the engine back in the same place every time. It is better to find a spacer to but between the front of the cylinder and the frame down-tube. Once the cradle is built, it will locate the motor. Generally the head stay is put on last after the other engine mounting bolts are tightened because it's purpose is to cut vibration and add rigidity to the frame rather than position the head.
Here is a good image of the problem. When the wheel is turned it interferes even more with the expansion chamber.
Start by removing the front mount. Remember to cut near the weld, not through the weld so that you can get through without cutting into the chamber. Be very careful to only grind most of the way through the tabs. You can then break the rest of the way through the weld by prying softly with a screwdriver. It takes patience do get it right. Once the tab is off, carefully grind the welds off. Again, take your time so you don't grind into the chamber. A sanding wheel on an angle grinder is much better for this than a grinding wheel.
Next we cut a section out near the inlet. You want to cut parallel sections so the pipe moves straight back. You can see that the section that I cut is on an angle with the inlet, leaving a wedge on the inlet. This is unnecessary, I later cut most of the material away to get the pipe tucked in far enough. This step is a matter of cutting, trying it out, then cutting more. Slowly sneak up on it rather than cutting out too much.You can hold the pipe in place with the mounting springs to check after each cut, this way you don't have to keep tacking it together then breaking the tack to shorten it further. You will have to shorten the springs as you go, which can be done with a strong wire snipper and a vice-grip. When finished, you will want about 3/8 to 1/2" clearance between tire and pipe, to allow for tire differences and fork flex. Be sure to turn the wheel left and right each time you check.
Once the front is tucked in enough to miss the tire, we then have to cut out a pie-shaped section to allow the tail to fit under the kick-starter and line up with the silencer. I choose to cut all but a one inch strip of the weld (marked in blue) to hold it together as I trimmed it down, but in retrospect, I think it would have been better to cut it all the way apart to allow cleaning of the metal inside the pipe. It is a bear to TIG a seam like this when old oil and unburnt exhaust gunk is burning and trying to escape. So cut it completely in half, right through the middle of the weld. Then us a wire brush on your angle grinder to clean the inside back about an inch from the cut. Do the same on the outside, removing the nickle plating if your pipe has it. Get it very clean or it will make you say #%@^%*!#! when you are trying to weld it.
I started with a very small sliver. Again, sneak up on the correct amount of removed material with patience. It is much easier to remove more material than to try to put it back.
Grind at it until it fits without hitting the frame, kick-starter, reed, case or shock. You may need to cut off the tail end of the pipe if it gets in the way while you are trying to get it right. We will have to shorten it anyway.
This is what mine looked like before welding. Note that the radiators almost fit once the pipe is modified.
Be sure to tack the tube about every 1-2 inches around the seam before starting the weld to be sure you don't end up trying to fill a gap at the end. Weld it in short sections, allowing the pipe to cool a bit between each burn. Otherwise one side may get hotter than the other, expanding more and causing a length mismatch. This can put extreme stresses in the weld. If you want the weld to look good enough to use without grinding, you may want to have a professional welder to do it for you. I'm no professional welder, so my welds may need a bit of grinding. Bad welders make for good grinders. Next we will mod the sub-frame to hold the silencer then we can shorten the tail of the pipe to fit to the silencer.