Aftermarket oil pump pickup height issues

Looks to me like that "spacer bar" on the pickup is going to hold the screen more than 1/2"off the bottom of the pan, no matter what...
Since you're using a Milodon "stock replacement" pan, you should be using a stock replacement pickup, which you clearly don't have.
Moral of the story: Don't mix 'n match these type of pieces from different manufacturers. Use the matched Milodon pickup for your Milodon pan.