Got my order from Bulltear in today and had some time to tinker on it this afternoon. I installed the oil filter bypass plug, cleaned everything up and installed the oil filter housing using the steel mid plate and the .007 gasket. I thought I had some plastigauge but did not, installed it anyway and it became clear very quickly that the .007 gasket was too thin, tried to turn the pump from the top of the engine, was obviously way too tight. I took it back apart and installed the stock gasket, pump turned freely, must be the size gasket I need.
I also mig welded two 1/4" nuts to the bottom of the pick-up, they have a thickness of about 7/32" so I am guaranteed to have almost 1/4" of clearance between the pick-up and oil pan. I need to pick up some more sealant before I re-install the pan, will hopefully get that done on Thursday and try it out, but honestly I'm not very hopeful that this will fix my problem, but want to try every in-expensive option before I go to expensive options.