Thanks to Joel for the pictures. I miscalculated something when building Joel’s frame and didn’t do enough seat tube offset (the chainstays here are a very short effective 41cm/16.1″ and I goofed, basically). Solution? Do a cutout in the seat tube. I think it came out ok for a first attempt, and I’d even do it again, albeit ideally before building the rest of the frame (doing the cutout with the entire front triangle+chainstays already welded up was nerve-wracking!)
So yes, you can have 16″ chainstays on a 29er and room for a 2.3″ tire, though Joel won’t be running a front derailleur (and can’t, no matter how much he wants to). Also check out the nice disc rotor brace that Joel specially requested (and sent the sacrificial rotor for) – I am only doing those by request anymore, since some folks think they look terrible, and others love them. So the default is tubing unless you ask for something else.