I'm sure you can get this to work with a little planning. The ATV set-up has the engine in a fixed location just ahead of the swing arm, using some type of chain tensioner to keep the excess slack out of the chain. I'm thinking about quads like the Honda 300ex, Yamaha Banshee, Blaster, most any sport/utility type set-up. While some of the buggies you see on the forum have the engine mounted on the swing arm assembly, my personal preference is to keep as much weight off of the moving suspension parts as possible. It makes for more responsive suspension action for less dollars plus, I think there are benefits for not having the engine bouncing along with the rear suspension. You may be able to solid mount the engine just slightly above the front swing arm pivot, use a jack shaft set-up running the chain down to a point more inline with the swing arm pivot then back to the axle to keep the chain tension/slack more consistent.
I could draw something out if you would think it would help you visualize it. You can probably take a little bit from everyone's input and come up with a great solution.
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