"I have a follow up question: The 240 Volt outlet has 3 prongs: hot-hot-neutral. The motor has 3 connections: hot, hot and chassis connector for ground. Is it acceptable to connect the 240 neutral to chassis ground of the motor?"
Ironically, the so-called neutral in a typical three-wire 240VAC residential installation is, in reality, ground. The older NEC code allowed the use of three wire installs even though many appliances (stove, dryer, etc.) used both 240 & 110- the 110 being used for things like timer motors, clocks, lights, etc..
The flaw in this was the lack of a true grounding conductor; with the center prong used as the neutral leg for 120, it now became a current carrying conductor. At some time in the 80's-90's, the NEC revised the code to a four-wire install for any 240 circuit supporting both 120 & 240. Thus, the outlet would have four prongs- hot, hot, neutral & ground.
Which gets us back to your situation: if you're trying to run the motor from your three-wire 240VAC outlet- but running it on 120 using the ground as neutral, you're still short one wire- the ground- or more specifically, you're short a neutral wire since you already have a ground wire (being used as neutral).
This brings up the question: if you're using a 240VAC outlet, why not run the motor at rated voltage?