What did I do wrong?

Probably has to do with the 742 came with the Dana Clutch SG. It is somewhat smaller in diameter than the cone SG. But after building these for many years, I can't say I have ever run into the interference problem your having.

It did have the DANA in it originally. I was having issues sometime around 1986 and swapped the carrier. Forgot I had done that and when I was restoring the car recently I was surprised when I saw it was the cone unit. It's all coming back to me now. I ran it that way for years with the 4.56 gears and never had an issue at temp. The 4.56 pinion head is much smaller though! Increased my shim to 090 and it looks close enough. The 4.56 pinion had an 090 on it. Now my carrier clearance is about 007. What to do???