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Boy, I wish I had your son's problem! I've got two pairs of kribs in a 38-gal tank ... doing nothing!!! The pairs swim together (male and female) sometimes, but nobody is breeding. Wish I knew what to do to kick things along.
As for your space problem: you might just watch the parents ... er ... "parent" the new fry for awhile. That's why we got these kribbies in the first place, right? And adding new fry to a holding tank (along with other fry) should be okay, as long as they don't get too big to eat each other. And how about the lfs? (They might not want them until they're older, though ...)
Just leave the fry with the parents in the main tank for awhile. They should be fine for quite a while, and provide a real show.