Thanks so much for the great responses.
This is what I suspected.
Pretty crappy that a gasket thickness can control a critical tolerance. Adding an additional gasket is a concern because the potential of too much slop.
I didn't realize there were different sizes of shim washers. I just used the ones that were in there since the engine was stock.
I will do some measurements and see what's up. I think I can use a dial indicator to figure out the interference.
When the bikes were made, there were different thicknesses of gaskets, and the engine builder selected what was needed from his parts stock.
After they were no longer being made, aftermarket gasket kits were just made the right general shape, and no real concern about thickness of the timing cover gasket.
When I was coaching people doing Fireball builds, I would always try to get them to carefully remove the timing cover, so as to hopefully not destroy the gasket. The black rubber ones were almost impossible to find.
It is important to remember that this is a design from around the 1930s, and engines were built by "fitters" that hand assembled the parts according to fit of the various parts that were not very precisely manufactured. In India, they just continued to build them in the old ways.