[robnolimit]

Sorry for the delay guys. First, the rack looks to be correctly instaled. Blake is correct about the pivit points, or pretty close. Keep in mind that the factory inner pivit points on the center link are not in the best location foor performance geometry. - If they were, everyone would be happy with the OE steering. We use the chevy rack for another reason as well, the rack travel. Mustang and T-Bird racks travel appx 5 1/4" total, or 2 5/8" per side, with the long steering arm on a C10 spindle, that will only turn appx 30 degrees. The chevy rack travels almost 7", and can deliver a full 42 degree steering angle (same as OE stop-to-stop).
The conflict here is with a mix of non OE parts, ours included. A bigger sway bar, with a mount on a tube arm that puts it a little higher than normal. - It's OK, all of this is good stuff. The fix here is a longer swaybar link, that puts the bar OVER the tie rod. ANd, this is better in the handling and ride quality areas too. Short links, and/or strap mounts (OE) tend to bind the swaybar in most of it's travel. Longer links will allow the swaybar and A-arms to move on their designed paths without binding, providing a more 'pure' suspension motion.
It looks like you have all the bushings and washers that you need, try a 3" tube spacer (3/8" sch.40 iron pipe) and a 3" longer bolt should do it.