This confuses me. 8 mils is a very small gap, like a few sheets of paper. Does "as far out as it will go" mean you can't get the gap big enough? If true, the magnet pickup would be hitting the reluctor teeth.
You want to get the pickup as close to the teeth as practical. The 8 mil gap specified is to allow for shaft wobble and temperature growth so the teeth don't hit. You would get the strongest signal with no gap.
