The O-54 diameter criterion could prohibit Lionel from using a shorter drawbar, but am not certain. The kinematic drawbar would work well - assuming I understand its design.
From swapping drawbars on Premier steamers I know that just 5 mm makes a huge difference in how tight an engine can safely make a turn without tender and cab hitting together.
Unfortunately, I don't posses the skills to cut and re-weld the existing drawbars.
