Where are you trying to balance the FS. The plan alway have the C.G. too far back. I would start at about 15% and go from there. That should be about 3/4" or so from the L.E.
Uniflow is the only way to go with the Norvel. I tried every on the Norvel, Backplate presure, muffler presure, etc. But uniflow is the only way to get a consistent 5 minute run on the Norvel. Start with atleast 3 head gaskets. That is most people problem, they over compress their engine.
From the photo I see your problem. You can start with the tank about 1/8" above the center line. I have dozen of Norvel and that seem to be the right height. You can bend the outlet feed so it doesn't hit the engine or simply shim the tank outward do that is does not hit the cylinder.
There is definitely room the more you engine forward so it clear the tank fuel pickup.
Go ahead a try flying it before you determine the final location of the C.G. My first Baby Flightstreak was way nose heavy, about 10% from L.E. and I still am able to put in a pretty good AMA pattern on it.
Actually it is easier to put tail weight rather that nose weight, because it require a lot less weight to balance.