The axel is supposed to be the right length, what about adding what you took off the disc side spacer to the pulley side one, that at least will give you back the same dimensions as before?
Out of interest, Beages, what shape is the disc in? From experience, I'd expect it to be fucked if it was dragging like it appears to have been.
Be careful mate, shit like that usually fails when you need it most, are the front brakes compromised at all?