Originally Posted by
onespeedbiker
That's what I would have assumed also (no corrosion, bolt and washers wire brushed with a Dremel tool with a drop of oil) but the unthreaded portion of the bolt does not extend beyond the derailleur, as it normally would to stop the bolt from locking up the derailleur.
Something is wrong. The correct bolt is a "shoulder bolt" and the shoulder should end just beyond (barely) the inner face of the body. It's possible that you have the wrong bolt, or someone stuck a washer under the head, or the shoulder is worn/rolled back a bit from prior over tightening. There is no stop cam, the RD butts directly against the dropout.
What may be an issue is that hangers of the era had a raised seat for the RD (similar to many modern crank arms) with the rest of the hanger recessed a bit. Without that seat, the body may be rubbing elsewhere on the hanger. You might try a thin 10mm washer between the RD and hanger, and if the shoulder is still recessed too far, a small shim washer with an OD small enough to pocket into the body to prevent the bolt from going in as far. Otherwise, if you only need a few thousandths of an inch, you can file the inner face of the upper body back to establish the correct relationship to the shoulder bolt.
If still not right, post a photo of the RD taken from the back showing the inner face of the bole and upper body together.