Those washers in the picture are not the domed washer, 53. See this thread for pictures of the domed washer:
https://forum.shopsmith.com/viewtopic.php?p=292150#p292150 Caution, it also shows pictures of it installed backwards. Is it possible that someone installed two flat washers where one domed washer should be??? Does your machine have washer Item 97?
I'm a bit lost by the picture of the groove. Maybe take one zoomed out a bit, I'm not sure of the location we're looking at.
I know the Gen 2 kit changes Item 96 because the quill extension shaft is longer. IIRC it does this by adding a spacer similar to 96.(?) So I'm not sure about 97, but don't see a second one in the pictures of kit content on SS.com. But you are saying your machine already had these two washers before you started on Gen 2, correct?
- David