I love seeing smartly modded airheads! It pains me to see so many 'cafe' bikes modified so as to have even less cornering clearance that they have to start with which isn't much. A sport bike that you can't lean over on? That's a poser.
Anyway, BMW forks have a lot of potential ride height for a reason. The reason being cornering clearance. GSXR forks have a lot less. 17 inch wheels and low profile tires brings it down further. Paralever rear ends increase wheelbase by quite a bit limiting cornering clearance even further since the longer the wheelbase the further you have to lean the bike over to make the same curve. Wide rear tires have the same effect for the rear tire contact patch moving to the inside of the bikes center as they lean over. Raising the engine IS a step in the right direction. I would raise it and move it forward via a drive shaft spacer on the output flange. I have seen lowering the bike pretty much like you are thinking work but remember to really raise the engine or you won't be able to go very fast around corners and I would hope that is the whole point!