Mike,
I understand you completely, after looking at it again, there isn't enough room for two washers and the second one on the inside problably would not help the situation. I still like the idea of the washer next to the circlip, I may try to draw a picture of this so everybody will understand.
Blltrdr,
I have given tha rh shift conversion some thought, but getting my brain to work on the right side gives me pause. Other than this rubbing problem, my LH shifter works well now that I installed the CMW/DRS shift improvment kit. With the kit, I almost never get a false neutral anymore.