You definetly need that spacer and it was normally there. Its actually a heat insulator intended to avoid heat related issues with the carby. Cheap and easy to install though I have found slow and careful is in order or you will crack it because its a tight fit. I do think you have other issues thogh. If you are serious about what is a thermostat its a bi-metallic device that fits between the upper hose "goose neck" and the block. It opens at a predetermined temperature and designed to allow the water temp to reach a given temp and maintains it by opening at that temp to allow water circulation to the radiator. Until it opens the water only circulates in the engine. The thermostats can be put in backwards so be careful when installing. I have been running a 180 degree thermostat in my '51 216 for years without any issues whatsoever.
