I would see how much lift taking that spacer out removes then go from there.

Well I have it all put back together except for the shocks currently. I left the bottom spacer and the spring insulator at the top off of it and the angles appear to be better. However now the springs appear to curve in (towards the motor) the closer it gets towards the top. Any idea what is causing that? Will getting the shocks back in help with that or do I need to put the insulator back on?

Pictures?