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The new fuel pump fits better but not good.
I’ve installed both bolts and am drawing the pump in. After installing the bolts in I got yhe pump started. It was still about 1/2” away from the blockThe bolts are starting to get real tight with 1/8” space left. So tight I’m afraid of breaking one like before. Should I bump the engine to see if the pressure on the arm will get less? I did not put any lube on the arm.

I don't recall ever having an issue installing a fuel pump on the inline 8 engines if everything is assembled properly. Normally the arm will just move inward against the spring as you tighten the bolts. Sometimes if the cam is on the high side when the pump is installed you do need to give a fairly strong push against the spring to start the arm and pump moving toward the block to get the pump close enough to start the bolts. If you are having so much difficulty and the arm still has more to travel one thing that comes to mind is bolt length. Could the bolts be too long for the pump you have and are bottoming out? Rebuilt and aftermarket pumps might not necessarily be what Packard used in a particular year and even though the shorter length was only for certain models it might be that you need that combination.

Something is not right. It should not require force to install the pump.