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Well played sir. Small observation/suggestion. If you’re happy with the fact the stud threads in slightly less than if it were going into a factory tapped hole.... could you not then trim the threaded portion of the stud shorter? If you did that then the stud would bottom out on the block as it was meant to.
Or I suppose you could leave the stud alone and stack washers until they just had enough height that the stud tightened against them and not inside your new hole.
This ball stud...when installed an seated against the block is allowing it to maximize it effectiveness in regards to not allowing this stud to teeter totter on the threads...because the shoulder of this ball stud is firmly against the flat machined portion of the engine block.
Using al of the threads that are on this ball stud...to me...is also needed.
I guess if washers were used...that is up to the person who is doing the job. Grinding down some of the threads so this ball stud seast...is also up to the person doing the job.
I know that 1/32" of gap would require such a small amount of material to be removed it is debatable if that material being removed would do anything significant at all in this area.
I know the 'rule of thumb' is that if a bolt is 3/8" in diameter...all it needs is 3/8" of threads going into the part.
BUT...I have no clue on this part due to it is providing a point where a side load is being applied...and the amount of force this side load is unknown to me due to I am not going to try to figure it out.... when for me...it is easier to put it back in the way GM designed it. I know the 'Z' bar is rotating...but there are still forces at play here.