This problem comes up a lot. The 216 had the water pump up high on the block. The 235 put the pump down quite a ways and forward too. I have not worked on a 261 so I don't know for sure but the pictures look a lot like a 235. So what happens to most of us when we put a 235 into the space that a 216 lived in is just as you have described. I moved the radiator forward to inside the support and I moved it down a bit as well. Then I put on an RV type fan cause it would clear the radiator and miss the lower hose. I think mine was a 15 inch fan. One of the guys on this site makes a kit that will re position the 216 pump on a 235 and keep it up and close to the motor. He also knows what pulley to use and has a bunch of knowledge about the issue you are trying to fix. I think that Patrick's has a kit as well. As you can tell there are more than one solution to the problem. et us know what you do and how it works for you.
