I am no Deve, but the key to being able to get away with a small modern filter is the airflow rating of the element material in that filter.
Putting a paper air filer designed for a lawn mower in an original small filter seems like a dandy idea, but that filter doesn't allow enough air through it. It is designed for an engine with one or two cylinders in very dusty conditions (thus extra small holes in the paper, which restricts airflow).
What are the specs for your K&N filter?
You can test to see if a filter is too restrictive with a tachometer. At idle, check the RPM with the filter on, then with it off.
You can also do a performance test by driving like you stole it with the filter on, then with it off. You will need to rely on the seat of your pants to make the judgement of a difference.
Carl