Nevermind. Problem solved. I got all excited about this before I did a no-nonsense, everything bolted together, mockup. I can actually get the sprockets to align when I shim the front sprocket as far inboard as I can get it without causing the chain to rub, and when I shim the rear sprocket out as far as the circlip groove will let me. Cool. Problem solved.
For the record, though, if I were using a front sprocket that was any smaller than the 16t that I'm using I wouldn't be able to move the sprocket as far inboard as I did. A smaller diameter sprocket would probably move the chain down into the boss in the cases that holds the output shaft seal.
While sitting in my chair looking at the bike, another little detail that needed to be addressed occurred to me. I didn't like the way the front fender looked on the rear edge. I had just cut it straight across and left it like that, but the more I looked at it the more it bugged me. The front fender on my '70 SL100 was my inspiration for this fender so I took a look at it. The edges of it are cut are about a 45 degree angle and rounded off, so I duplicated that on the 350 fender. I think that I'll be a lot happier with it now and it won't bug me when I sit in my chair and gaze at the bike in the evenings.
The CL pipes that I have are a bit rusty and needed a bit of welding repair. Plus, I've always favored the look of flat black exhaust pipes on motorcycles. The problem is, hi-temp exhaust paint never really lasts and I've never wanted to pay the money to have my pipes ceramic coated. I have a buddy who works with a guy who does powdercoating on the side and I guess he has some hi-temp exhaust powercoat that's supposed to be great stuff. He's done some pipes for local shops and I guess the stuff really holds up. It's not too expensive (still waiting to hear from the guy), so I think that I'll give it a shot. I'm planning to have the complete set of pipes and mufflers coated flat black but leave the heat shields chrome.
I've been trying to save money lately since I'm between jobs at the moment (short term) and buy the parts that I need when I get back to work. However, I want to keep making forward progress on the bike and I'd hate to put things together now only to have to take them back apart when I buy the parts that I need. So rather than put the wheels on now and have to take them back off when I get the tires, I'm off to order them up now. Money is a renewable resource.