I just read in the FSM that the pickup should touch the bottom of the pan. I always adjusted so that it was just off (maybe 1/8" to 1/4").
Guess I was wrong. What say you?

No way i cant see that being true i never let my pickup hit the pan.

In a stock app it's OK as there's plenty of area there for the oil to be drawn in at the scalloped opening. In a perf app I like 1/8" and in an app w very high rpm/hi vol pump/loose clearances even more than 1/8 and I make sure the ID from (& including) the pickup thru every twist & turn right up to the rotors is 5/8" and the output side up to the galleries is 1/2" and any restriction also makes the inter shaft require more torque/wears it & the bushing & cam gear more & can be helped by opening passages. I highly recommend baffles around the sump perimeter and a swinging baffle in the sump bottom is even better but alot of fabbing. I'd drill the angled passages from the main gallery to the mains to 5/16". OT imnho a pan cannot get sucked dry. EDIT I make sure the pickup bottom is parallel w the inside pan bottom as alot of times the angle is quite a bit off & I heat/bend it to get it there.

In production the tube contacts the bottom of the pan. If it doesn't hit the pan you run the risk of it breaking off due to virration.

excellent tip . I will start welding a nut or a spacer on the bottom of the pickup on apps that are off of the bottom to anchor the pickup

The STOCK pickup has a partial shield on the bottom of it. This sets the proper height only if the shield touches the bottom of the pan. That is the way it is designed and setting it higher is improper.