" there is no 1 1/4 inch clearance"

Not sure were you are getting this requirement from.

Even NM cable does not require 1.25 in clearance if parallel to the studs.

Bored holes in the studs require the clearance (or nail plates) to protect from drywall fasteners holding the drywall to the stud.

Brickeyee, as I mentioned in the post, this requirement is from 300.4(D) Cables and Raceways Parallel to Framing Members and Furring Strips. It requires that cables or raceways are not less than 1 1/4 inch from the nearest outside surface where nails or screws are likely to penetrate. If that clearance can not be maintained, a steel plate or sleeve must be installed. I read that mean that NM or raceways that are attached to the stud must be at least 1 1/4 inch back from the front of the stud. My question is whether Schedule 40 PVC qualifies as Rigid Nonmetallic Conduit as noted in Exception No. 1

If yo0u are using listed rigid non-metallic conduit you are under the exception.

What is the marking on the conduit?

it is Schedule 40 - the wall is thinner than Schedule 80, so I need to know if Schedule 40 is ok, or if I need to replace it with Schedule 80

It should have an article number from the NEC or some other legend.

Plumbing pipe is not acceptable.

It is electrical PVC conduit (not plumbing or anything else), Schedule 40. I was hoping someone would be able to tell me that it satisifies the code requirements, but since I am having no luck I have decided to replace it with EMT, because I am having a hard time finding a source of Schedule 80 non-metallic tubing....

If it is marked as rigid non-metallic tubing it complies.

Article 352 covering RNC does not even call out schedule size. That is really a plumbing convention were pressure is concerned.

352.100 refers tyo refers to 110.21 and requires RNC to be marked with manufacturer's name, trademark, or other descriptive marking to identify the manufacturer.

Pull a cut sheet from the manufacturer and see what the actual listing says.