I have machined considerably more than 1/16" off manifolds to straighten up warp problems. The shop where I worked had a BIG belt sander that would work on cylinder heads, manifolds, etc, and we used it pretty often. Try disassembling the intake/exhaust assembly and have each one milled flat, then leave the joint between them slightly loose while you're installing them. That should solve the misalignment problem.
Jerry

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