The adjusting rod in my car does not slope at such a steep angle as yours- its only about 1/4" lower in front and definitely not an inch lower. Also, the distance from the bottom edge of the horizontal Z-bar to the lowest edge of the arm is 4-1/8", measuring slightly on an angle (as that arm has a zig zag in it). Looking closely at mine, as with your setup, the adjusting rod does not line up exactly parallel with the arm as you might expect, and I used the "kick" towards the arm as mentioned by SomecarGuy.
The arm in your picture looks lower/ longer and slightly shifted towards the passenger side in relation to my car. If you are positive the clutch fork is engaging properly with its pivot inside the bellhousing, and that the Z-bar is in its proper position, then it looks like the lower arm of your Z-bar differs from mine. Good luck.
Another thought- did you install the spring retainer on the frame end of the Z-bar? It locates the bar cross-car. I recall wondering if the frame-side ball stud split-bushing was in the right position inside the bar, as that would definitely affect the cross-car location. Hope that's not too confusing...
