I just returned an FMF Fatty that I bought for my YZ 250 (also a 1997). The fit was awful! No tank melting, but by the time it was all said and done, the silencer was at such an angle, it hit the tire!
I took mine back to Rocky Mountain ATV for a full refund. Those people rock. I think FMF has some real issues with this pipe.
I have an FMF Gnarly pe that fits ok, nothing special. The only pipe that fits properly is the Pro Circuit pipe. The Pro Circuit pipe adds some top end, but makes the low end a bit mild.
I say you contact FMF and give them H*LL. They have earned it.