Hello Tim, I got your message. I haven't been around this site at all for the past couple of months. Been super busy and boatbuilding has been moved to the "backseat" (or maybe the trunk would be closer to the truth)
Anyhow, your issue can be easily remedied. The "great oracle" at Merc has thought of everything, including how to connect the steering on a tiller conversion.
Merc part number 11606A1 will fix your issue. Unfortunately, it sells as a whole kit (see pic below) and they go for about 95 bucks. But it does give you all the clearance you need so the steering doesn't bind. The new tilt tube in the kit is longer than your current one which wasn't designed to fully support a steering system. A bit of a pain to change, but will add a few years of life to your steering cable which will be "less exposed" to the elements than with the shorter tube.
The first pic is what it looks like actually installed (15 horse Merc/Mariner tiller converted to remote). You can see the rod clears everything and even will (mold) to the shape of the cowl on an extreme turn.
So pricey, but there is an OEM solution. Alternately, you can just try jury riggin' something up.