#50 chain and sprockets are the same as a 530 chain, which is bigger than your original front sprocket. I am running into the same issue right now, deciding whether to mill down some #50 sprockets, or chance using the 520 front with a 530 chain and use #50 sprockets for the jack shaft and axle. Not sure if I mentioned this before, but you really need to consider the increase in weight you are putting on the engine when you look at gear ratios. I am essentially tripling the weight the engine was designed to carry, and adding some height to the rear tires, so I will be changing my final drive ratio from the stock 3.9:1 down to 4.6:1, to keep from wasting the clutch on take off. I might add, that if you drop the gearing down without a jackshaft, you will have to run a big axle sprocket, which will limit your ground clearance.
As for the axle size issue, you got me
but I might add, if you did add a jacksaft, it would cure the chain location issue, as well as give you tons more options with gearing. I might add, you would be able to get away with only milling down one gear on the jackshaft to match the output sprocket and chain, then use the ever popular 530 for the final drive to the axle.