Swingarm preload gap, gurus help me out here

Hey guys, nice to have a dedicated XR650R forum around, hopefully this place can become a vault of knowledge for the XR community.

I am reassembling from a full tear down and have run into a little confusion. When I went to reinstall my swingarm I found that I have way more free play then I remember when disassembling. From what I remember and my pictures confirm is that both outside dust covers of the swing arm were sandwiched against the frame. On the right side there was no sign of the preload bolt pushing against the swingarm.
However now I have a solid 1/8-1/4" gap that I can only fill by cranking down the preload bolt! This doesn't seem right to me, I checked on a friends bike to confirm the dust cap is right against the frame! Where did I go wrong? How could I have gained this extra room it is as if I am missing a shim or my swingarm shrunk.

Strange problem I know hopefully I am missing something simple. Here is a couple pictures to help explain.

This is the right side (preload side) before I took the swingarm apart.



Here it is after reassembly. I know I have all the bearings, pivot collars and dust caps installed. There is nothing else that goes between the frame, swingarm and engine to take up my mystery room.


Thanks for any input you guys might have!