he has nothing supporting the rear end of the engine. no trans, mount or anything, the azz end of the engine has sagged from the weight without support. since the inside ball stud is actually screwed into the rear of the block, any sagging at the rear of the engine will cause the inside of the z-bar to fall with the rear of the block.
once he either supports the rear of the block or installs the trans, the rear of the block will come up and the inside of the z-bar will follow with it levelling it out and pulling the lower arm away from the header. you would be surprised just how much an engine will sag with nothing supporting the rear of the block.
personally if it were me, id go ahead and install the trans and all related components to get the engine back where it supposed to be. sure you can support the engine with a jack or whatever, but you will just be guessing as to how much the engine has to come up. at that point you will be able to tell whether you need to adjust anything or there is anything out of wack.
Ok, the more I thought about it, the more this started making sense..agreed that having the tranny/mount in place will certainly help out quite a bit. I installed my motor and trans together, with pivot ball already in place on the block with no issues using GU parts.
Based on the pics that should remedy the zbar being angled down when viewed from behind the motor.
He may still have side to side issues to deal with, and/or header clearance problems that need to be overcome.