That has dropped a bunch. Did you measure it at the top of the ring or the space at the lower pivot.
First things first. I have found success making a vertical groove [chisel mark] near the corner of the nut. You don't want to actually hit the corner you will end up with a rounded off mess. Create a groove just in from the edge.
Second thought. I feel I must also share. The rings can also drop due to corrosion between the steel upper swivel shaft and the aluminum ring. I have found in most cases when the ring drops the ring is worn. Unless it has external steering. I suggest you also check to see if the seal is laying on the top of the gimble ring.
Keep me posted. I hope it will tighten up for you. The spec is something like .002 to .010 measured at the lower pivot between top of ring and the upper pin holding ear, boss what ever it is called.
Hey Jim, while we are on the subject, I have both my rings dropped about 1/4" as far as I can tell (they lift that much when I jacked the drives up to remove them). But I do have external steering. So what should I expect to find worn when I pull these things? At this point I am planning on pulling the transom assemblies since the motors will be out, which should make the repair easier right?