Re: bending aluminum frames
1/4" isn't much. Have you considered a dished sprocket. The teeth are off-set from the center so you might be able to get close to your 1/4" goal by using one.
So if I understand you correctly, the chain is hitting the seat stay, not the chain stay? Your engine must be mounted high in the frame?
Some photos would certainly help.
Age and Treachery Will Always Triumph
Over Youth and Skill & "Charlie Don't Ride"