To install Arneson drives in place of Alpha 1s what all needs to be changed? Engine location,elevation?? Can some of the space necessary for the transmission be inside a set back enclosure?

It all depends upon what you are going to install. An ASD6, or the newer #7M Kit as things are the same but different. With the #7M the engine will stay in the same relative location, and the standoff box will cover your Alpha cutout; whereas the ASD6 would require some glass work and a lot of movement in the engine department.