It sounds like you should have a total of 1/16" the way it is since the sleeve is 3 1/16. Does it look centered or is it binding on one side or both? Is it the original spring mount? Does that need sanding off rust/grunge? Is the aluminum bushing centered in the spring?
Just some thoughts?

66 Belvedere Vert, 4 Speed/Jerico, slowly, very slowly, getting faster - NA LD Wedge
New New Best: 10.56 @129
68 B'cuda 4 gear Jerico - Another New Best of 9.86 & Trying to slow up
https://www.youtube.com/watch?v=T4jDLKwd9Gs