OK, then why did this happen?
I just checked it again. If you look straight down, perpendicular to the base, the nipple does protrude a bit. If you take a straight edge, go across the bolt holes in the cylinder to see where the piston would be, then a straight edge across the bolt holes in the case, it is very, very close.
I'm not convinced it did not get hot, expand a bit, and contact it. You need about 20/1000 gap in the squish to make up for expansion, and the dome is a lot closer to the pin.
I'm not sure that I'm right, but I will tell you, the tolerances are very tight.
I think before I re assemble, I will block off the crank with a piece of paper and take my 12V sharpener with a diamond stone and take it down a bit. It can't hurt.