it looks to me like the bottom part is the problem. down by the bottom bracket might need to be trimmed , redrilled , or the hole might need to be slotted more. looks like the distance between the bottom bracket and the rear dropout has too much fender crammed in there. if you should need a spacer afterall , you can use a small 1\4 inch or so socket from those cheap junk chinese tool kits or a neat old one from the junk drawer