[AROWHED]

Today I removed the VW pulley,then the alt fan, and then the 3/8" thick bushing behind it. Put in a new bushing that is around half the height of the 3/8" part...didn't measure it exact though. Put it back together. Note there is and always has been a flat washer between the fan and pulley, but it is only there to make up for the offest recess that the 12SI fan has built into it...the washer must be in there to prevent distorting the fan when pulley nut is tightened and forces the larger diameter VW pulley against the fan. The washer I used was the exact thickness necessary to allow the VW pulley to sit flat and flush against the front face of the fan without distorting it.
Picture attached here is the result...note that alt fan in now correctly recessed into the alt housing further, and belt alignment is much better. The fan should draw air through the alternator much more effectively as well, since the gap is gone.