The floor joists are true dimensional 2x8.

Apply for a dimensional variance on the vacant lot to allow a smaller lot and/or setback so it can be built upon.Your best first steps are to sketch a plan, possibly with an engineer's help, then contact the zoning department to discuss your idea with them to get informal feedback on your liklihood of success before you spend a lot of money.

Dimensional lumber-1. 

I think tiny homes are constrained by the dimensional requirements to be street legal without a state trooper escort.

I can't tell you how many properties have units easily convertible from 1 bedroom to 2 bedroom units, units with favorable dimensional standards which can boost rents with no photos to showcase these attributes, assessment square footage that is not correct,  upgrades not identified in the marketing materials etc.

The drawings are 2 dimensional reflecting 3 dimensional objects. 

Having actual conversations with people might be more helpful that getting one dimensional answers from BP.

Malarkey 30-Year Dimensional Shingles.I have gotten estimates ranging from $5,500 - $7,500, which all seem like total rip-offs to me given the small size of the house.What do you think?

Luka, its hard on a 2-dimensional forum to get the full tone, but I think most if not all of the posters on here root for each other no matter what advice is followed. 

Aside from the tight margins, based on the description of the existing property and the relief you are seeking I can assume you are seeking a dimensional variance, not use.