Very impresive undertaking, in my book!
Ryland, just guessing here, but I`d say that whatever the law is, if the bike was originally a 250 and still LOOKS like a 250, as long as he isn`t holding up traffic he should be able to get away with a smaller (even technically illegal) engine. I guess we`ll find out. Hope he manages to bump that top speed up in order to cover that "not holding up traffic" clause that I just invented