Ahh, catalogue curse. Whilst I see less problems with the formation of the chloride (do you mean diazonium, rather than the zwitterion?) I can't see a proton to deprotonate to form the ylide at that end
Might be worth a go the way you initially suggest then, perhaps with cold permanganate or similar - it's not as if the compound is several laborious steps down the route (for you, anyway). How do you propose forming the formyl from the nitro? The Nef will need an extra carbon, I think - perhaps a Henry or something, but there's still no alpha proton?