What did I do wrong?

If you had grab rail fitted, that is about 4mm thick.
There should then be at least one large washer behind shock plus a thick (about 3mm) chrome plated washer under the nut
When shocks are tightened up at bottom mount, does the top move outwards?
Keeping things lined up will help them work properly and improve handling slightly
Cut the threads down a little, always a good idea to have less width sticking out
 
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