Yeah man, I don't think that system is gonna work with your engine, it's meant to be put next to a rotor that is around an inch in diameter so the magnetic field fluctuates very fast whereas on the big flywheel of your engine it takes a pretty long time for the magnet on the flywheel to come back around. Also your engine runs at lower rpm than a chinese 2 stroke. I would either do what silverbear suggested or if you are feeling brave look up what people have done with RC plane motors and attempt to make a generator by running a belt or chain from your engine to one of those. Up to you but these lighting systems are HARD
KEEP ON RIDING!!!!