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The problem that I was encountering was that the spacer ring was too large of a diameter to clear the hole in the clutch's backing plate. As you can see, I had some interference. The ring on the left was the smaller one that SEW sent to me at no extra charge.

Even with the smaller spacer ring, there was some interference and I had to file the hole in the clutch's backing plate about 1/8" larger diameter to be safe.

I think the problem was due to a variation in the design of the PTO clutch. The hole in my clutch's backing plate was 1-5/8" and SEW obviously based their design on one with a much larger hole.

SEW was quick to send me a replacement which was also 1-5/8". However, because the two diameters were the same, the hole center did not match exactly with the shaft center and, although the pieces now fit together, I found there was still some interference. With a pencil, I circumscribed a circle around the spacer ring which then gave me an indication of how much material to file away.

Fordlords commented that "the cracking and flaking of the plastic coil coating is common on those old Warner PTO clutches. You can preserve their life by covering the outside of the coil surround with several thin coats of silicone RTV gasket maker. The wire windings themselves are covered with an insulation coating too, so a few cracks of that hard plastic is really no reason for panic- believe me when I say it, even a well worn old Warner PTO clutch is a lot tougher then the ones they are putting in new tractors today."

After the backing plate had enough clearance and was torqued down, the flywheel is the next item to be installed.

The sleeve goes on next.

And now the pulley.

The last items are the clutch cover and the bolt. Because the output shaft of the Honda engine is longer than the Kohler's, you need to put the sleeve spacer between the pulley and the bolt. The sleeve space is longer than required but everything works properly once the bolt is tightened. There are three holes in the side of the clutch cover near each of the cover hold-down studs. You use the 0.017" feeler gauge to set the clearance between the cover and the flywheel.