Okay WTf?
I didn't dremel or file my barrel. I had to file the mount on the M203 to widen it (I have a VFC M203 btw, not G&P).
Yours obviously mounted just fine, don't file your barrel.
The problem appears to be the front mounting bracket... your flash hider might need to be straightened, too.
reference:
There should be a seperate bracket for the M16Ax.
edit: M16 bracket looks like this:
The M16 barrel doesn't have a notch/step for it, so that extension is required for correct spacing (it rests up against the front handguard cap)