trixz was trying to link this
As you can see, you REALLY need to route the exhaust out a fair bit.. its right near your heal....
But as stated, yes, anything is possible.. personally i prefer the twin exhaust, but even then, its too "ducati" for me.. but when has that really stopped me ? damn, my bike is more R1 than trx now
@Madivi
OK.. ill try to explain as best i can (its morning here, im a little tired). I do currently have a 2000 R1 swingarm inplace of the stock unit. By some photos you will realise this new swingarm is 72mm longer. This alters the handling of the bike.
Its very stable at higher speeds because of this. At the cost of the turning circle being bigger and the way the bike "drops" into corners.
I re-shortened the swingarm to make it handle identicle to a stock swingarm. So all i have really done is made it look different without actually changing the handling.. Its the same as putting a YZF750 swinger in there.
Ill also give you a few tips on this area. The 2000 R1 swinger has the suspension coil in the middle of the bike, the same position as the trx. Which made it very nice. The 2004 (which i could have used, as i know where a spare one is !) is offset.. Meaning the coil is actually to the gear side of the bike not the brake side (hope you understand).
By doing this the hole where the coil sits in is off set to one side, and there is more space now on the gear side. The exhaust actually comes up right next to the coil in the middle of the swing arm.

Not the best picture, but you get the basic idea of how i mean. (i hope)
One thing to observe here is that a longer swingarm will always provide more stability. The smart boffins at honda realised that the "optimum" pivot point for a swingarm is actually the front wheel axle.. Obviously this is retarded so they try to make their swingarm as long as possibe, but the wheel base is still short as possible while maintaining practicality.
What this means is if you were to mount your engine say 30mm FORWARD and bring your mounting brackets forward by 72mm (check TRX of the month, the big alu silver part where the swingarm bolts to,, move it towards the front 72mm) and then put in a R1 swingarm. The effective wheelbase is STILL the same as the factory trx swingarm.. but you get the added bonus of having better geometry for it.
If you did indeed do this you would have PLENTY of room to put a nice underseat exhaust thru the swingarm (you would have to side-mount your suspension pieces.. But if your going to the extent modding everything else, why stop there
I hope i made some sense.. now.. coffee then shed time..