I did my level kit as well. It's not right and I'd bet money either the rubber isolator or the spring is not indexed correctly. You can look at the bottom of the spring perch to be sure if its the spring or not. If there is space between the spring and the bump stop for it it needs indexed. Post a pic of the bottom if you're not sure.

 

There's a polyurethane rubber washer disc that is missing from the top of the spacer and the mount. Yeah like other said the spring should be set in and then rotated clockwise (looking down on the axle spring mount from above) until the end of the coil is right up against the stop.

Even if the kit doesn't specify that urethane piece I'm not sure why you would want to have metal on metal contact there. Notice the OEM frame mount doesn't have a perfectly flat surface.

 

Like this one that I'm holding up in this picture. I am currently in the process of taking out my spacers and blocks for a proper lift that replaces the front and rear springs so perfect opportunity to take this pic, where I also have the axle spring seat shown:

 

Is the lower spring pig tail sitting flush against the stopper on top of the lower front axle housing.

 

I replaced my setup today with a Procomp 2.5" level that included the isolator bushings. They fit perfect and I'm returning the set that didnt seat properly. Thanks for everyone's help!

 

The world is back to normal again


See the drawing below. You can see that the issue didn't have anything to do with the Spring, it was all because the spacer did not provide a large enough hole on the bottom to clear the factory spring mount.

 

I have an 07 same frame and axle and I bought cage aluminum 2 1/2 spacers they fit perfect. They are also the same outside diameter as the spring which I like. You will need an adjustable trac bar now. Your axle will be off center if you look at it. If I buy a 13 im keeping my cage blocks, company went out of business and nobody makes solid aluminum spacers anymore.

 

I have an 2011 F250 and added autosprings 2 inch leveling kit. I just went outside and checked my spacers. Everything sits perfect. No issues.