That looks like tha same carb as on my kinetic/vespa- kind of. Didn't a lot of people tell you to cut out a piece of filter that fits inside that large circle---
What I'd do is get a hose clamp that is the right size for the outer diameter, and get a piece of filter foam that is bigger than the outer circle.
Lay the foam flat against the big circle, and push your hose clamp over it. That would fit, if you didn't tear the foam, and it should work, without messing with the choke lever. Matter of fact I think I 'll try it with my vespa/kinetic--It just barely hit 30mph today.
You could use a lawn-boy filter at the hardware store- I think it's just a big square of foam, and it's pre-oiled.
The problem with putting a K&N filter on a bike like that is that it would stick out at least 3" and probably hit your front fender- unless you could find a pancake filter for it.