seems like the clearance is very little there, do you grind the aluminum cover where the chain is, seems like it will be very close and the chain will be the part sticking out the most???

The crank sprocket seems ok.

 

Yes you will need tio grind on the timing cover a little. i sprayed my chain with white litheum grease, then tightened down the cover. Unbolted cover, and sprinkled blue carpenters chalk all over it. It sticks really well to where ever any grease from the chain rubbed off. I had to repeat this about 3x to get it just right.

 

you can use that blue grease too-thats what i did to check clearance with valve covers on rockers-

i wouldn't drown it in there though

personally i'd grind the cover, then put a tiney bit of indicator (whatever you use) on the cover and then spin the assembly

 

down to just touching now, I will go more because the chain floats fore and aft.