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3) Grinding for clearance (this is the last resort and yes, you have to disassemble the trans..try shifting the cover though first, I've only had to grind on one trans in 40 years of doing this)
Good luck 
What about grinding the 1/2 lever for clearance ?
IIRC, the contact point on the 1-2 lever has a 'shoulder' on it and you'd be up against the shoulder when you are grinding. But there's nothing saying it couldn't be done. As a personal note, if I'm hand finishing something, I always have more luck holding a true surface on a convex surface rather than a concave so the reverse lever was the choice for me.
"We live in a time when intelligent people are being silenced so that stupid people won't be offended".
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