Outdoor Power Equipment and Small Engines - Flywheel To Coil Clearance for Magneto Ignition

I have seen in an earlier post that there has to be proper clearance between the flywheel and coil magnets in a magneto system. My 2 magnets on the coil are rubbing directly on the flywheel in 2 or 3 different spots, The coil can only be mounted using the 2 mounting holes in the engine. It is an older Echo weedeater SRM 140. There is currently no spark at all.
How do you set the clearance for the coil magnets to flywheel and what are the exact specifications or rule of thumb for this? Please advise as the darn weeds are GROWING!
There are also 2 small plastic sleeves on the mounting bolts for the coil. Do they belong on top of the coil under the screw-head or underneath the coil where the bolts are threaded into the engine block?

The rule of thumb is the thickness of a buisiness card or dollar bill folded in half either way I thing the spec is about .010"

I don't know much about that part of a engine. But what I do know is yes, they are not supposed to be scraping and or hitting the flywheel

They shouldn't make contact, and usually a business card works well. Most air gaps are supposed to be .010 to .014". Check for side to side play in the flywheel to make sure the crank bearings are not bad.