Bob, it does appear you’d have issues with the seat tube. It appears to angle back and connect to the inner frame rail almost where the front of the third bearing hanger is welded on. That would limit the size of the rear sprocket you could use. We run anywhere from a 56-62 tooth gears, and I doubt you could get a 56 or 57 in there. If you know somebody with some 35 gears, see what might fit without hitting the seat tube. It does appear you have enough room for the chain to run between the right side set support and the third rail. But that would be pretty close too.
To make the chassis work by moving the seat tube forward might not be worth the risk of totally screwing up the chassis.
I might suggest taking it to an event where there are some 206’s running and see what might fit, where.
Sorry I couldn’t be more help. You might try asking on Bob’s 4 Cycle Forum, there’s a bunch of folks there with more experience then me.