No big surprise there, I found the same with my Downey mounts. Rather than 2x4s I spaced my motor up with nominal 1" material. Most of the motor instalations I've seen have the motor higher than mine... And even what you've got there. With the 700 trans, your motor is likely a little further forward (and thus higher).
Here's a thread with some pics for comparison...
https://forum.ih8mud.com/40-55-series-tech/448066-sbc-swap-manual-steering-2.html
Here's a thread with some pics for comparison...
https://forum.ih8mud.com/40-55-series-tech/448066-sbc-swap-manual-steering-2.html