OK, looks like I have enough clearance now, it's at .008".

I went through the checks mentioned previously; I took the #3 cap off, re-tested and still had .002". The all the caps came off, tested again and still the same so clearly it was the bearing.

So I went and did the sanding procedure - I rubbed the thrust bearing surface on some wet, 320 grit sandpaper. The flattest surface I could find was my drill press base so I set it down on there and went to town.

Once I started, I checked the outer width of the bearing with a dial caliper to gauge how much material I took off but I couldn't get consistent readings. (prolly my cheap-o digital dial caliper)

Anyway, after several rounds of sanding/cleaning/sanding I put the crank back in without the caps to see where it was at and I got .008". Obviously I have to check it again when everything is torqued down but clearly it's within the correct range now. Even if I lose 1-.002" I should still be within acceptable margins.

Bob, the studs are just finger tight before I put the caps on. They have an allen key slot at the top to ease with installation. Once they are down I just give them a little snug to make sure they are all evenly seated. That's it, no real force.

Thanks for all the help. Will report back later when the caps are torqued down.