Is that on the dual pot / Level pot directly above it? Can you possibly post a pic?
I can imagine what you're describing, but I don't recall ever having any interference between the rows of pots, even with a dual pot installed. The Photon Vibe and Son of Ben have similar placements (1" vertical spacing) and they went together smoothly.
These really were designed just to solve the issue of shorts between the dual pot and PCB, that seems to be a recurring theme in the Troubleshooting thread.
Somewhat related question, have you had any issues with the insulator shifting from side to side? I'd imagine it'd be more of an issue with a single-ganged pot than a dual... I was considering adding through-hole plating to one or two of the holes in the insulator so it could be easily "fixed" in place with a little solder.