Wrench87 You are not the first guy to install an after market ALT. Mine was a direct bolt on except for the output stud for the battery. I added an extension on it for easier connection. The other issue is,IF you modify this Alt, you MIGHT loose the life time warrantty on the unit?
Calling PA first might be a good idea. It sound like a 1/4" is what you need for clearance. Could you add spacers to both other pulleys and clear everything? Just a thought. Good Luck. Rick L.