Steering knuckle

seriously, would spacing the header farther from the engine help? There are companies that sell parts to make headers and you could buy the plate that bolts to the head with no pipes and sandwich it between 2 gaskets...
Are you sure the motor is sitting flat in the K-frame. I had some clearance problems once until I realized the motor had cocked itself around a couple of degrees. Loosened the mounts jacked up the motor and got it sitting right, and voila, no clearance issues.