Ok I really think the spacer issue is what's wrong. Your install procedure sounds perfect. You should have gotten 6 spacers (unless you spoke with Jody and you told him you wanted to keep the unit close to the top of the tank, therefore he would have given you the short screws and 1 set of spacers, but from the sound of things, this is not the case).
Do not touch those 2 tiny nylon screws, and the pulley height is irrelevant concerning your problem. Just call Jody tomorrow and tell him your problem, and that you think it's due to you only having 3 spacers, and he'll send you out another 3 spacers. You may want to ask him for 3 of the short screws while you're at it, as then you can try both setups, and decide for yourself if you want it higher or lower. He will not charge you for any of this. Good luck with everything, and I'm sure Jody will take care of you.