Joe, you were right. Absolutely no movement in the k-frame.
So, I have 3 options to move forward.
A. Live with it.
2. Drop the k-frame and slot the holes.
D. Buy an HDK kit.
An 1/8" isn't the end of the world and is probably within the factory tolerance. I would want to add some clearance between the inner fender and DS header, but I don't think that would be a big deal to do when the motor comes out to put a good one in.
I could do a hybrid of the first two by building it at 1 1/8" offset so the drivetrain is square in the chassis but with an eye to being able to slide it over 1/8" if/when I can. I did drop most of the k-frame bolts and it appears that the DS holes are the only ones that would need to be slotted. This option or just ignoring it allows me to move forward.
The HDK kit option was a joke. It took me 4 or 5 years to get to this point and the idea of 4 or 5 more years while I save up to buy a $5K kit makes me nauseous.