not certain how to off set or convert into fixed sprocket
You don't want to make it a fixed sprocket.
The splined shaft allows the sprocket to "float" a bit, so it can maintain "self" alignment with the chain and not wear the chain side plates so rapidly.
Take off the front sprocket and have a look. You'll see the base of it is wider than the tooth width. Bring the sprocket to a machinist and have him mill one side flat and make a spacer the same width as the thickness he removed. Then put the sprocket back on with the spacer on the inside and the milled flat part on the outside. That will gain your clearance back to save the engine case.
Personally, I would rather ditch the oring chain and just use a standard type, which is narrower and doesn't have clearance issues. 'Cause now, every time you wear out a front sprocket, you'll be back to the machine shop for another modification round to make a special part for the bike. Or worse, you or whoever you sell the bike to won't remember the mod, and the bike will become a leaking damage engine case headache.