[xb-60]

You're spot-on Bob. The outer edge of the rim for both setups is in exactly the same place; the inner rim on the 8.5" wheel is 1.53" further out; that makes the centre of the 8.5" wheel (and hence the centre of the tyre) 0.78" further out, so the outer edge of the (same size) tyre moves out that much as well.
Cheers,
Glen