Their is the official way to remove the headset, and the garage
homebrew style.

I usually grab a 1- 1/8" solid bar of steel and catch the inner lip
and beat it out with a hammer.

You can find some reasonably priced headtube reducers. Basically,
they will allow you to go from 1-1/4" down to ~1-1/8". You will need
a new thread-less 1-1/8" headset.

Like ones seen here:
http://www.cambriabike.com/shopexd.asp?id=6576

You can score these on Ebay for like $15.
(These still are made because of older Cannondales and such....)

I usually make my own headset press using a 1/2"~3/4" threaded rod a
series of washers and a couple of wing nuts at each end. A mallet and
anvil also works but may mar the cups.

For forks I have found this link:
http://www.calhouncycle.com/productcart/pc/viewCat_h.asp?idCategory=136

Great forks at a great price.
The only problem is most Bike E's require a 9" long steer tube. (Very
Rare!)

ANOTHER FIX:

I have converted a few Bike E's to dual 20/20 style. In the past I
have just left in the original headset and worked around an off the
shelf 1-1/8" fork w/ an ample amount of rake.

I basically took a slip fit 1-1/4" cro-mo tube that was 9" long and
slipped it over the steer tube of the shorter 1-1/8" fork. (remove
fork race crown if need be.)

Then carefully on the drill press drill 4 holes towards the center of
the new 1-1/4" OD x 9" long steer tube you just mounted on the fork.
(Two horizontal holes facing north to south, two horizontal holes
facing east to west.)(This ensures you hit all the normal bike
steering stress points and then some.)

Then beat on the original Bike E bearing fork crown race. (Use the one
off the original fork and ad onto your new fork.)

I basically plugged the holes with a slip fit rod made of steel and
cut it slightly shorter to be just less then flush with the new tube
wall. With a welder filled in the holes and grinded/ sanded flat 'n
flush.

*NOTE -If you do not have access to a welder you can try JB weld
epoxy, or possibly even soft, solid, long, 1/4" OD flat head aluminum
rivets and beat them flat at one end. (If you use rivets you may need
to put the bearings over the rivets first before beating for clearance
issues in the headset.)

Order a new 1-1/4" star nut flange or try to remove the old one and
install in your new fork. I suggest trying to find a new star nut
flange as reusing them is not sound advice.


MY LATEST FIX:

Bike E RX. The fork allows enough clearance for a slim folding bike/
recumbent front rim.

A will use an ISO Bead diameter 406 wheel/rim & 1.25 IRC tire.

I will then put the forks angled in a Bridgeport mill. If you look
ever so closely, the front of the fork has been milled out already
from Bike E with a 1-1/4"~1/12" end mill. Most likely to fit the
V-brakes with fenders?

I plan to start out using a 1" end mill and see if I can go up to a
1-1/4" end mill with out disturbing the weld in the rear of the fork.

This should fit a nicely built, slim custom wheel and tire in the
20"/406 x 1" wide flavor. The 16" brake mounts for V brakes will be
useless at this time so you will have to build a special wheel using a
disc brake hub.

Then I have a custom shorter crank to ensure my foot does not hit the
front wheel. (I hate that)

Hope that helps and will post pics soon,

Cheers,
-JK