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.