I thought only the last year of the 1500 had the 'lectric temp gauges. But MG being what it is, there was probably a bit of crossover in the parts bin. But Nigel's a '76, and his mechanical gauge was original.
Mine had a little rubber o-ring between the glass and bezel<span style="color: #FF0000">*</span>. It had gotten hard and crumbled when I took the gauge apart. Re-assembled without it, using just the gasket, and still fit together fine. Maybe if you try taking your o-ring out and fitting the bezel without it, it'll give you a little more space between the glass and the dial?
(<span style="color: #FF0000">*</span>Not the o-ring on the outside of the gauge; the one actually inside the bezel itself.)