Yikes! That's pretty bad. That's worse than the toe overlap on my Raleigh Comp GS. 27" wheels, right? Somehow I think some of these 80s bikes were really made for 700C wheels, and they just threw on 27" because that was the thing back then.
Also, VO really should consider moving their drawbolt hole lower. I have the same complaint with VO fenders on my Raleigh comp. Honjo places the holes lower on the fender, where toe overlap wouldn't be a problem.
I don't know what to tell you, other than it doesn't look like fenders are going to work out on this bike. Luckily, I have zero toe overlap on my 25" Shogun with 650B wheels.