Well, an inch isnt too bad.
You could buy some 5/16" (grade-8 fine-thread bolts, 4 matching nylon lock nuts, 4 lock washers and a stack of high quality 5/16 flat washers in the largest outside diameter available. (ask for 5/16" Fender washers)
Then run your bolts upwards through the mount, install a flatwasher and tighten a nut on each of the 4 bolts going through just the mount. Then stack up as many flat-washers as necessary, install the engine and finish off each bolt with 1 more flat washer, a lock washer and a nylon lock nut.
But before you fully tighten these top nuts,
slip your chain on,
adjust a 1/2 inch of chain slack,
and then elevate the rear wheels and spin the axle so you can watch how your chain/sprocket alignment is effected by slightly twisting the engine back and fourth in its semi-loose mounting bolts.
The purpose of this last step is simply to try and tighten the engine down in the position that its perfectly square to the axle, just so you wont have problems with your chain flying off...