shim the engine UP.
Another option would be to mod the motor mount so it had a few more inches of adjustment towards the rear of the kart.
Now what, move the seat frame?
Got video but not sure how to put it up.
Hopefully the chain is not "tight", you do want a little bit of play. Glad you're up and running!
5/16"UNF-24, as I recall. Length may vary with your application! But 1 1/4" is probably a good start.