The car is a manual. It's hitting the bellhousing, nowhere near the gear box. I figured if I made a smooth dent several inches long to keep it flowing it won't affect it too much except for the slight reduction in flow area of that tube (probably will still better than the stock exhaust). What concerns me is that it may rattle against the bellhousing or heat it where it makes contact. Maybe I'll need an insulator between the header and the bellhousing.

What I might try to do is build a wooden vice to grab all 4 tubes near the flange and try to bend the whole set of 4 at once. It won't take much I think. The wood will keep it from scratching and will keep pressure off the flange as I bend it. I'll just need a lot of leverage to bend all 4 at once. If that doesn't work maybe I"ll try your idea feral. But I'm not sure if thickening the gasket will help enough. Thanks for the ideas.
MIchael