If it were mine I would not use the smaller flywheel on a K341. Unless the block is also an "A" (as in K341A, etc) it would need to be modified to fit in the frame, and that may or may not be possible, depending on the casting.
Get the engine from him, sell it to someone who needs it, and use the $$$ to buy a rebuildable K241 or K301 that'll fit with no mods.
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