Something sounds wrong there ,mate.
Cannot see how the clutch could possibly work with that sort of gap at the adjusting stop.
I would suggest you check the clutch throw-out adjustment first. That's the two big nuts on the central boss. The workshop manual tells you what to do, but you may need an assistant to operate the clutch while you adjust the nuts and you'll need at least one skinny 1" whitworth spanner to hold the inner nut while you tighten the outside nut with an adjustable.
After that, you can concentrate on the clutch cover stop adjustment. You can get away with as little as 5 thou here, but after all this, if the clutch does not release fully (ie gear crunching), it means there's wear in the mechanism or faulty hydraulics that will need attention.
_________________ 1967 Cooper S - new front bearings to do. 1965 Cooper S shell - Slow progress. No time or money! 1966 Deluxe- next rustoration! Mk 2 & XJ6 Jags. Less said the better.
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