I disagree about leaving the fenders off. The old frame/fork/light combo demands fenders to set it off right. I would find a large set in aluminum if possible, and an aluminum tank as well.
Is the gasoline motor really necessary? Have you ever ridden a bicycle equipped with an engine? It's easy on the legs, but noisy, smelly, and you are prone to getting burns and shocks while getting the damn things set up.
Have you thought about an electric set up? The new Schwinns seem to use a front hub with a drive motor, and the battery pack could be fit into the tank. Your bike would be able to keep it's clean lines, and the electric front hub would look like an old-school drum brake.
A 7 or 8 speed hub (or the Rohloff 14 speed, if you've got the bucks) would make it very versatile, and easier to ride up the hills if the battery (or engine) gives out.
You should consider electric. It's far simpler, probably no more expensive, and would be much more cutting-edge.