I took a better look at how the engine sits in the car, its really not "off" at all. I can see if it was crooked, but it really isn't. Plus the spacer on the 318 mount really shouldn't move the engine forward any. I suppose the poly mounts might be biased forward a bit, but everything lines up at the transmission mount.
Unfortunately what I think I'm going to do is drop the K frame again and just notch the mount. Easy enough to make the changes to the mount, but I don't have enough room to do it in the car. I really don't feel like pulling the transmission since I just finished installing it. My plan is to support the engine with a hoist and drop the K frame, make the notch and box it, and then reinstall the k frame.
I love the construction of the pan, but I think Milodon should have built in some more clearance on that engine mount. Or at least mentioned that it could be a problem, notching the mount would have been a piece of cake when I had it sitting on my bench when I did all the seam welding, reinforcing, and boxing of the steering box mount. Now it means I have to drop the K AGAIN, and reinstall everything again. PITA. Considering that this is a K frame that's in spec, a frame that's in spec and never been in any accidents, with zero rust, etc, and that the engine mounts actually are original to the K frame, it'd be nice if it actually fit with the pan. The only thing that could effect the pan are the poly mounts and 340 with a 318 mount, but that's not an uncommon scenario given that the 340 mounts aren't reproduced. If that's all it takes, I won't be the only one with this problem.