Hi Eric, I am running a 351w and experienced the same issue. I ended up using a drop base of 1.5" and a round 14"x3" air filter. Others have also used a smaller oval air filter that just fits under the hood scoop. I think it's 12"x8" and you can see a pic here of it:
https://www.summitracing.com/parts/sum-g282/overview/.
Also to Dan's response, from your pic it does look like your engine is a bit high, what kind of motor mounts are you using?