You mentioned that the 'nipple' was protruding through the collector? The depth is causing more problems than it is obviously helping.. When I set mine up (557) I had several trial and errors in an attempt to reduce pressure build up. Things changed slightly when I installed mufflers. In your case, if you have the tubes penetrating too far, this would explain you reverse pressure. This is counterproductive, and can easilly be fixed.
During my trial and error, I placed a bag over the end of the hose, and watched what the bag would do. If the bag inflated (regular gorcery bag wrapped with electrical tape, real high tech) then I know I was getting reverse pressure, and I needed to move the instertion tube. Once the bag would deflate and suck into the tube, I knew I had it close.
Mine currently sit at an angle but flush with the inside of the collector so that the insertion tube itself does not disturb the flow within the collector and disturb the scavenging affect. Turn the air around here, and you might as well be running cheap headers.
Keep in mind that not only are the tubes cut at angles, but they get welded in at an angle too. I believe that the hole was 7/8" for mine, and I tig welded them.
There is no science to this, only that you must achieve the highest amount of vacuum while the exhaust flow is at its greatest. I pull almost 4 inches all of the time.(once it is close, you can put a gauge on it) Largest problem was when I was stabbing the throttle under severe loads. Mud and the street apply very different loads on the engine, but the air flow past the pitot tube are very similar, so you should have no problems, once you get the angle and penetration correct.
Again, you do not want to just stick the tube into the collector and hope to get lucky.
This is considered "free" horsepower, as it requires no belt to turn a pump, nor does it require anything electrical that will draw from the alternator.
Unfortunatley, get it wrong, and you fill the crankcase up with pressure and you go backwards. You rob power, and contaminate your oil.
This is worth a few thousanths if not more.
Some have gone the electric pump method, but your kit is probably suitable: