I think the front wheel size is the least of your worries. In fact, if you put a 17" wheel on the front of that thing, it would change the chassis geometry dramatically and probably cause it to handle like a basketball.
I have a V-strom, and I know people take them to the track, but I can't see how it would be any fun. As bxr140 pointed out, it would probably be dangerous. Maybe if you could find an f800gs racing series?
btw, there's an sv650 in the FM right now for $2000. It's not in Sweden, but there are deals out there.