Well, I hope things work out for you.
As to using the existing crankset: yes, it's very close. I'd imagine you would have to use a different bottom bracket / spindle in order to move the crank further out from the frame. You may also need to remove a link from the chain when you start using the smaller chainring.
FYI, I also found I couldn't use several of the higher cassette gears when in the little ring; they'll rub against the outer ring. (This will also happen if you use a smaller ring and keep the chainguard).
Moving the crank further out might resolve both of these issues.