Maybe you saw ので ("because") in the sentence? Then no, this sentence does not have one. This の after 歩いていく is a plain nominalizer, and you have misinterpreted (or ignored) では.
noun + では has many usages, but here it roughly means "With X" in the sense of "If X is used/chosen".
(lit.) With a smartphone, the screen is too small.
The screen is too small if you used a smartphone.
With this (amount of money), I cannot buy it.
If you choose to eat out every day, it costs a lot of money.
(This の is a nominalizer.)
Also note that 歩いていく is in the present tense, and this -ていく implies someone moves from here (to the station).
Therefore you have to read the first half of the sentence like this:
Because the station is far from here, if one (chooses to) walk (from here to) there,...
And naturally, the correct choice is 2.
"I walked (from the station) so I am tired" would be 歩いてきたので疲れています. (There is no は after で, くる is used instead of いく, and くる is in the past form)