[Rick Parker]

If the plate that the slave is mounted on is moving (even 1/4") that cannot be tolerated. It must be absolutly ridgid. That small distance probably IS the difference that is preventing the release. The other principle is the fluid transfer ratio between the Master and the slave. Assuming it worked well at one time, focus on stabilizing the plate that the slave is attached to. There should be more than 1 bolt attaching the mounting plate to the bellhousing (it is difficult to seel in the photos). There should be for structural consideration more than 1 bolt attaching it. The stacked washers might also be creating a pivot point for the plate when the pedal is depressed and the slave actuated, there is a lot of force created by the hydraulics in an effort to overcome the pressure plate release spring.