I am putting a timing gear setup on my 88 5.0 and the cam gear does not completely line up with the two idler gears. the crank and two idlers line up fine. these are MAC timing gears by the way. now my question is, am i going to have to grind off some material from the back of the cam gear so rides closer to the block which will then in return make it line up right with the two idlers. or is there a thrust washer of some sort that has to go behind the crank gear to make that come out more from the block to make the gears line up right. The directions that came with this set-up make no sense but it did say something about removing material to obtain correct gear alignment. Any help will be greatly appriciated.

This is a gear drive I take it?

Some gear drives need the block or other parts modified to align or mount the drive components. Go with what the manufacture suggests. If the instructions are unclear, then CALL THEM! Mac are a good bunch of people I'm sure they can point you in the right direction.

I just got done recently with the MAC timing gear install, and I also had the same exact problem, but you forgot to mention where you had the idler line up with, the crank gear or the cam gear, on mine if the cam gear and idler were lined up the crank gear was to far back (towards the front main bearing cap), I did speak with MAC and they said if it was no more than 75% off of the gear mesh then it wont be a problem, although they also said they were working on a crank gear shim kit.
also depending on the timing cover you have, the easiest was to maintain proper idler front to back end play instead of running back and forth grinding the cover to get proper idler slack is almost impossible, is to totally remove the oil ramp (rib) on the timing cover then purchase some "Plumbers Putty" and right were the rib was, put a generous amount of that putty re-assemble with a few bolts, tighten, then remove to get a good idea were the idler pins are, (Should leave a pretty good impression) drill and tap the cover for 5/16 hex bolts and that will take care of the frustrating grinding-and-testing, then when you get all done re-assembling just tighten the hex screws and back off just until it loosens up, (also don't forget Loktite or monkey snout) just don't forget to adjust screws before installing harmonic balancer (as I did, go figure) as this will be very hard to adjust.

Thanks for the replys, i just sat down and took my time and i must of done something wrong in the beginning because last night i put them all together and eveything lined up perfect, all i had to do was keep grinding and fileling material off the timing cover and as luck would have as soon as i could fit the cover on w/ gasket i miched it and it was between .002 and .005. from the cover to the idler axles so i just left it at that and was done with it.