No wonder I've never seen a Crystalyte e-hub mounted on the rear wheel of any beach cruiser made. My Felt MP is more than a inch too narrow between drop-outs and it fits 3 inch wide tires. I had to notch the Crystalyte axle with a Dremel Tool in order to get it to fit, but the only thing that really matters I guess is that now IT DOES FIT and IT'S INSTALLED!
There is some drag on the e-hub but the 49cc gas engine should be fine spinning that rear hub once I install a big bore carb on it. The resistance is not as bad as I thought it would be.