Hi Jason, thanks for posting the pics, it gives us a clearer picture of what is happening in the front end of a Diplomat....I think that you might have found the cause of the misalignment....not just the end caps (as I suspected) but in the assembly itself..
I now know the reason that a lot of dealer workshops don't like doing the reel/bedknife adjustments....there is no fine tuning....In my opinion, Scott Bonnar really lost the plot with this method.