Just to 'check my work', I grabbed the 36mm impact socket and put a 4' breaker bar on it, chocked all 4 wheels with 5" tall chocks and I tightened the everliving shit out of that castle nut on the left side. I only stopped when my weight, combined with the near collapse of the wheel chocks, prevented me from going further. Jacked the car up and the fucking axle STILL moved in and out. This only validated my suspicion that I'd have to take it all apart to figure out what the hell was going on and fix it. And I'd just made that significantly harder to do on one side. Knowing the now 'gorilla tight' left side castle nut was going to be a challenge to remove, I shifted sides to start taking things apart on the right side of the car.
I got to the bracket assembly and noticed the spacer again. The instructions clearly state that the 3mm spacer is only required for swing axle post 1968 (very very few models)...and then I realized that, like everything else in the instructions - that probably only pertains to the Type 1 axle. In fact, the dimensions they show on the previous page don't apply to the Type 3 - so it's a fair assumption that this also does not apply to the Type 3.
It'd be great if the Type 3 kit got Type 3 instructions.
3mm is just enough space to cause moderate damage and make me question my mechanical abilities for a few days.
I wish I'd thought to take a video of the 'axle shift' but I was on a roll and focused on getting it done and completely forgot about it.
The axle, predictably, doesn't shift in and out anymore. Everything lines up pretty well and I moved on to the left side. That was tricky - I wound up using two spare tires as wheel chocks, all of my weight and a 6' bar to get the nut to break loose after about 10 minutes of trying. It broke loose just about the time I'd decided that I probably wasn't going to win this one. Flash forward about 20 minutes and they're both fixed and everything is good to go. In hindsight: I should have done a 'push/pull' test on the axles after I'd installed the brakes to check whether or not I'd need that spacer...I will be checking all kinds of shit going forward.
In other news:
A couple of nifty tools came in the mail today - a compression tester (now I have two), a spark tester that goes between the plug and the distributor to check spark and a test light so I can static time. All I'm waiting for now is the solid rocker shafts so I can put them back together and try to get the car running again. I also bought an electric fuel pump to replace the mechanical fuel pump to eliminate one source of fuel getting into the case. A fuel pump block off is also on order. I might try to swap in another mechanical fuel pump in the interim since it's all plumbed for it anyway.
I'm too fucking stubborn to lose.