Originally Posted by
grumpus
Incorrectly installed lower bearings won't affect the gap at the top, they will just reduce the available thread for the locknut (apart from the obvious crunchiness). But definitely check both sets. I managed to invert an upper clipped ball set recently, an immensely embarrassing error for someone who's been wrenching bikes for as long as I have. At least nobody knows about it.
Agreed but if they are sealed bearings (OP never answered that question), some have a beveled edge (angular contact bearing) to fit the cup, the squared edge facing into the cup could cause that gap. If OP has one bearing incorrect I would also check the placement of the bottom one as well.