I'm not very good at compromise :)  I've already figured out what I thought was generous might be about 15% lower than I need.

Does it compromise the style a lot?

If the budget is unrealistic, here's usually compromise involved, so set your priorities on what you MUST have, and what you can live without for now.

And having a wife we have decided to compromise and go with option 2 (I wanted option 1).  

Getting 3k for 200k is great too.In Portland what happens is when you add an adu you lose some quality of life to the original building which may have had a nice yard that is then compromised.

I own several houses with knob and tube and although they are not as desirable as updated electrical never will an inspector require you to update and entire house if the knob and tube insulation or insulators are not compromised.  

Judges like to compromise.

If you want to invest and succeed, you have to compromise. 

We eventually compromised on a duplex we house hacked and now she is all in on REI.

I thought that was a more than fair compromise for the additional risk I was taking.