Dangit. I'm having a similar issue. My pan is the milodon stock replacement style and I always had only about 1/4" clearance, but hey whatever clearance is clearance! After removing and installing the engine this last time the drag link was just touching the pan....I'm thinking it was the point at which I tightened all the mounts down as there is a little adjustment play there...didn't catch that. I'll be watching it closely this time(engine's currently out).