I know this is an old post but I am working on a 1965 Dart and I have the same problem!The replacement pump is about 3/8" taller on the botom side and it doesn't clear the mount like the older and shorter pump does. I tried cutting the rubber with a stanley knife but like "340doc" said there is...
Now you are talking about a poly 318? They haven't made those since 1966, then in 1967 they started making the 273's, then 318's and 340's. The polys were a completely different block than the later s/b v-8's.
Up to 1969 the timing marks were on the passenger side of the motor,
in 1970 they moved them to the driver side. That may be your problem
with the wrong balancer that you used.
I just read that you verified TDC was correct...disregard this post.
I've like to hear from a machine shop...I don't think it is possible to bore it out to 4.040.
You could stroke the motor and most likely get 340 inches or more. Read this link.
http://www.moparchat.com/forums/archive/index.php?t-111166.html
x2, I agree with mopardude, also if you have an HP motor be sure and run a 3 or 4 core radiator if you do any driving in town or get caught in traffic every once in a while! You'll be glad you did.