Bolting a dana 300 to my aw4. Need help

I have a 90 cherokee with an aw4 with a 21 spline output. I got a 7/8 inch adapter clocking ring and a 21 spline input for the dana 300. i went to test fit it on the tranny and it doesnt contact by like 1/8 an inch. Whats hitting? i thought if there was a 7/8th inch adapter on the dana 300 it would bolt up?

Is there a difference in output shaft lenght from the 21 spline to the 23 spline output on cherokees? Help