Me thinks you might have bigger problems.
If the swaybar ocation is standard, the pic would indicate that the new xmember has mounted the lower arms further forward on the car. (Hence the swaybar mounting problem) But, with the strut tops in their standard location, you have effectively increased the castor. This can be desireable, to a certain extent. But do you know how much it has increased by? Mad as castor increases oversteer, and with the heavyer motor up front, you may find that it swaps ends on you at the drop of a hat. (Then again it might not)
I'm just ading my two cents.
This is why I modified the standard Xmember when I put the L20B in my sunny. Altering the location of the arms can adversley effect suspention geometry.

Can i shorten it myself? like a bit of cutting and drilling? or does it need to be heat treated or something?

You know, if you have the arms on that bar shortend, it would make for a stiffer swaybar. It might be cheaper than having a custom bar made.

I didn't move the swaybar so it's not in the wrong place.

it's because the 180B Xmember sits further forward, all i wanted to know is whether it's fine like that or do i need a custom swaybar?

Sorry for the double post.
I accidently clicked twice on submit buttom.

There is definately something wrong here.
The piece where the red rubber is must sit straight.

Something I noticed.
The U-joint that is used to bolt the sway bar onto the body, I notice that it has a bolt coming from above and then a nut bolted onto that. As far as I know this must be a Bolt that is screwed into the body from the bottom using a socket.
Did you move the factory bolting location of the U joints?
Can this maybe cause this spacing problem?
Just trying to find out what can cause this.

There is definately something wrong here.
The piece where the red rubber is must sit straight.

Something I noticed.
The U-joint that is used to bolt the sway bar onto the body, I notice that it has a bolt coming from above and then a nut bolted onto that. As far as I know this must be a Bolt that is screwed into the body from the bottom using a socket.
Did you move the factory bolting location of the U joints?
Can this maybe cause this spacing problem?
Just trying to find out what can cause this.

Here is the pic of my swaybar you guys wanted.

Sorry man it's been my 21st all weekend so i've been drunk.....

no pics?
I'd like to see what's going on. I've been trying to think back to my old 120Y, and I'm sure the 120Y bar bolted onto the 180B front end with the link pins straight - just like it was all meant to be there..