Looks like the pinion needs to be shimmed into the ring gear farther also. I always set the gears up before cutting the housing to check clearances. Yes it takes more time to pull and install them multiple times, but you would not have your issues.
View attachment 263644 I installed the same kit, followed the directions and had no clearance problems. Only thing not covered in the instructions was the gasket surface had to be machined post welding because the bottom plate pulled in about .015" when I did the inside pass.
Looks like the pinion needs to be shimmed into the ring gear farther also. I always set the gears up before cutting the housing to check clearances. Yes it takes more time to pull and install them multiple times, but you would not have your issues.
What do you plan to do about it?
How much has the ring gear been trimmed? What about grinding a small trough right under the gear, maybe 2"x3" about 1/8" deep? (not sure how thick the Ballistic plate is)