Hi Larry,
1/16" is pretty darn close!
I think it's a good idea to keep the fan as close as possible to the radiator, but maybe a minimum of 1/8" or 1/4" would be better. That way if there is a slight wobble or flex in the fan blades, they won't strike the radiator fins.
Some alternatives to Randy's good suggestion:
First, I bet the TR4 extension could be trimmed a little. Perhaps a maching shop could skim 1/8" or so off the front of it. (Note: some do away with the extension when installing electric fans... Glad to hear you are using it... it also provides some harmonic dampening effect for the crankshaft!)
You can also move the radiator slightly forward, maybe another 1/8". The bottom mounting holes probably need to be elongated a little to accomplish it. I did this on my TR4 to make a little more room for the electric fan that is now installed, but it would work equally well to accomodate the plastic fan you are using. Just watch that hood clearance is okay and with long neck rads, it might be necessary to adjust the support brackets a little, - tilting the rad backward - to keep the cap from rubbing the underside of the hood.
I understand the plastic fan also does away with any need to balance the fan/hub extension assembly. Good news... since the balance pieces are often lost and no real instructions seem to exist for how the factory balanced the original assembly! The manuals just describe how to re-align parts using the 1/16" registration hole the factory drilled through the baqlanced assembly. Of course, that only works if a matched set of original parts are being used! D'oh!
If you get the TR3 extension, watch the clearance at the cross-brace between the spring towers. There were several different braces used and there is some variation there from car to car. It can be a problem with certain fans.
Finally, I suggest using Locktite on all the fan mounting bolts, or better yet tab-locking washers.
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