If the cups were not fully seated, wouldn't there be less room between cup and locknut, not more?
Maybe not, the lock nut/washer would engage at a high spot and wouldn't apply equal pressure across the races and allow everything to loosen up. I realize he never took it off the bike but the pic just doesn't look right. If it does require alignment, yes another spacer will be needed.
To the OP, any bike shop should have a spacer for you, cheap.
edit. At second glance, it's not the cup in the frame, it's the top adjustable cup/race that looks wonky. As mentioned, the bearings are likely the source of the problem, in one way or another. Maybe there's just one oversized bearing in there?
