I’ll hold it for you 
If playing in front of other people, I sit and hunch. When recording at home, I sit and prop. Because my left hand skills are so sucky that I have to watch what I’m doing, even if I stand and use a strap the right boob is still in the way.
I want to go on record as saying this is totally acceptable, and a fine idea to boot.
Opal, which leg are you resting the lower waist of the guitar on? The short answer to your question is that your chest needs to be behind the body of the guitar, but you can switch legs for comfort. Some women prefer the left leg when presented with your issue.
I assume you are holding the guitar in the traditional classical manner, with the waist resting on your right leg. Try switching to the left leg and make some comfort adjustments in your posture and the way you position your arms and hands and you might find that it suits you better. Take a picture of yourself as you are holding it now and post it. That might also help us to determine the best position for you.
large, classical guitars really are a different breed.
Here. Found this online, and this is about what I am referring to. Again, your comfort is the most important thing, because you won’t continue to play if it isn’t comfortable.
Send in a picture of you with the guitar. It’s possible that this thing is just so massive that it is completely wrong for you.
Well, “large” isn’t an issue as it’s a 3/4 size guitar. I can’t take a picture because I’m in New Hampshire in a cottage in the middle of nowhere, by myself until Thursday. Tomorrow when I attempt to practice again I will try different legs.
It might be massive for a hobbit or something, but it’s a tiny guitar.
Like a requinto?
Cut a hole in the back to leave space for your boob? Sorry, I got nothing.
Ok, then you should have no problem switching to the other leg.
No, like a 3/4 sized classical guitar.
Enthusiast: I just tried resting it like the picture, and it doesn’t work because I am a short, small-framed person* (with proportionately short arms) and putting it on my left leg means that my left arm is pretty much straight out to reach the end of the neck. Maybe if I was a better guitar player I could play like that but at the skill level I’m at now, I need some bend in my elbow.
*my reason for getting a small guitar to begin with, incidentally.
According to legend, the Amazons would cut off one breast in order to enhance their ability to rock out.
Ah, see, but I have no desire to rock out. I want to play delicate, complex classical guitar pieces, not rock.
I think the 3/4 size guitar might be your problem. I play on a full sized classical guitar (a Yamaha G-80 from 1969, the sound is really nice.) I’m a small-framed person too, (5 feet tall, 110 pounds) and I’m right handed, so I play with the guitar on my lap with my left leg raised and I have no problems reaching the fretboard. Actually, my arm is quite bent, as I have the headstock part of the guitar angled back just slightly. The “shoulder” (I can’t remember the term I’m looking for) of the guitar hits me right between the chest. You might want to consider switching to a full sized guitar. Also, my very first guitar was a total piece of crap, made by valencia, it was also 3/4 sized. I didn’t get very far when I first started learning, probably because of that crap guitar. I found the G-80 to be heaven compared to it, and I’ve progressed quite far comparatively. (Although I seem to be doing the exact opposite of what you’re doing. I’m learning more chord, strum, strum, strum while singing.)
So, my advice: get a decent full sized guitar. 
ETA: Here’s a stupid question: What kind of guitar is it exactly? What brand/model?
Aw, you know what I mean! Now get out that scalpel!
Never played a guitar, but I’d suggest perhaps trying something like putting a pillow between your belly and the guitar for example. Takes zero time or money to test, at any rate.
And if you learn to play anything like this or this, make sure to post a vid. 
What is the make and model? If I could get a better look at it, I might be able to make other suggestions. The short answer is to do whatever it takes to make it comfortable and easy for you to reach all of the frets on the neck, but I suspect you already knew that.
Also, I say this in every thread I post to on playing the guitar. It is worth every time and pain to learn to play the guitar. It is the most rewarding hobby I’ve ever had, and I’ve had hundreds.
Can’t tell you what to do with the guitar you’ve got, but if you go guitar shopping I always point out this guitar to big boobed guitarists. It’s even a classical guitar- just your flavor!
Of course the artist in the picture is the only person I have ever seen with such a guitar (and, as follows, the actual individual guitar that she herself owns is the only one of its kind that I’ve ever seen) so, even if you are guitar shopping, it might not be an easy find.
But its unique cut seems pretty good for respecting boobage!
(Yes, the artist pictured is not big boobed, and yes she is standing, but look at the cut of the guitar)
Why not look at one of these - I am pretty sure that you don’t even need the upper frame 
Do Ovation do a classical guitar? - the bowl back may be more comfortable.
Hmm - I see that they do.
Otherwise, I see a new market for a slightly different form of cut-away classical acoustic guitar
Si
I’ve always been suspicious of this. If you look at ancient depictions of the Mazaons – on vases and sarcophagi and the like – they clearly haven’t had any surgery done. And most mythological sources that tell stories about the Amazons don’t say anything about this supposed practice. And you have to ark at it to make “Amazon” = “without Breast”. The “breast” part is pretty iffy. In short, I suspect another o’them male fantasies here.
If it ain’t worth it for archery, it certainly isn’t worth it for guitar-playing. Just say “no” to performamce mastectomies.