He just put the spring on in front of the "U" dropping it another 3". Old Lowrider showbike trick. There's a thread for that bike too: viewtopic.php?f=6&t=10611
Is that one of the Scwhinn Stingray choppers you put the engine in? I normally am not a fan of those bikes but it looks like the engine belongs there... I am now thinking of trying to build up one of those myself...