At this point I only had 3/4 of a nut of thread length left. I could have put a vise grips onto this and hoped for the best, but in not wanting to have to drill out a stud I opted to weld a nut onto the stud.
In order to locally ground the nut and stud I put a vice grips onto the nut and grounded the vise grips. Based on the layout, the TIG arc jumped to the vise grips a couple of times which caused the smoke you see in the next photo.
All in all though, this worked out well. The stud still came out pretty tough, so I am glad I took this approach rather than risk getting the stud broken off flush.
With the stud out I could now install the spacer, adapter, filter, and alternator. PlanePower has listed right on their website that using spacers larger than .75" may interfere with the FS1-14. I could not find anyone that had any good photos of this combination, so figured "may interfere" would be workable.
As expected, the alternator does in fact interfere with the adapter (in two places). The first place is the safety wire ear on the adapter. This is not really that big of a deal because one could either clock the alternator differently, or grind off the ear (as there are two ears on the bracket).
The next interference point though is a bit more interesting. If you look at the top right bolt in the oil filter adapter you will see that it is perfectly lined up with the boss on the alternator. Each one of the four clocking positions of the alternator line each one of the 4 bolt bosses up with this bolt. A quick and easy fix for this would be to file 1/4" off of the boss. This part of the boss is not even threaded and I am pretty confident wouldn't hurt the structure of the alternator housing.
I debated this for a while, and I am going to scrap the idea of putting the 90 degree adapter on and keep the original straight oil filter housing. My mine thinking on this is two fold. One, the adapter does add another gasket and another place for oil to leak. More importantly though is if I went down the path of modifying the alternator housing, this means that if I ever needed to replace the alternator, that I would have to again make the modification. That is fine and dandy until you are on vacation stuck at some random airport hand filing down an alternator housing.