Thanks for the suggestions!
I checked out Silver State Cycles's website, and was intrigued. After speaking with Scott a couple times, I mailed off the engine! I'm keeping my fingers crossed that no problems pop up. Wret, I was going to submit your plan to a local frame builder but I doubt I could beat Silver Cycle's prices.
Scott thinks that the can get this to fit in his frame, albeit possibly with some massaging. I'm definitely getting a fuel tank and jack-shaft from him as well. The only issues are sorting out the rear brake and shifter setup. We'll see how it turns out.
Should I look into fabbing up a foot brake for the rear wheel?
Anyway, I will post pictures when I get the frame and engine back!
I'm planning to call my friend at DFW Powercoating http://www.dfwpowdercoating.com/
to schedule coating for the frame.
P.S. for those interested in the XR80 engine. I spent time comparing parts lists for the XR80 and XR70 (an engine similar to some of the horizontal Chinese atv pit-bike engines). It turns out that the XR80 uses a 14mm thick kick start shaft. Compared to the pit bike engines, this thing is massive.
The XR80 transmission is supposedly very nice and seems beefier than the XR70s. Even the XR80 stator is 15 watts more powerful. The crankcase is the same width as the XR70 and pit bit crank cases. Interestingly, the engine is at most 15-16" tall, compared to 17.7" long pit bike engines.
Finally, a gentleman who installed a 95cc hop-up kit got over 8hp from the XR80. I've heard that 10hp is achievable. This should be an interesting project!