Engine fitment issues: Please help

[Tagg33]

Hi guys, help me out. I need some opinions on what direction to go to fix this problem. After getting my firewall done and front suspension parts painted I put it together and found out the engine can't sit where it should. I did not test fit the engine with the new crossmember kit prior to paint. Unfortunately I assumed with a kit that everything would fit since it was made for this truck and this engine. When I first installed the engine it sat at 13 degrees because the top of the trans hits the tunnel. I made cuts in the tunnel to relieve it and got the engine to 7 degrees and now the front of the oil pan is resting on the rack and pinion. I'm trying to reach 6 degrees without anything rubbing.
Should I:
1. cut the oil pan to recess the area that touches and then deal with my trans tunnel to move that area up.
or
2. move the rack and pinion down an 1" by drilling new mounting holes (wouldn't this change the geometry of the suspension pivot points)

Any suggestions or opinions would be greatly appreciated. This snag has held me up too long and I would like to start correcting it this weekend. The engine is a 350 with TH400 trans if that helps.