Thanks for the help. What is not pictured is the clamp that mounts to the seat tube. It goes between the the two lock nuts and that odd looking nut on the outside. The spacer (washers) should work between the the lock nuts and the seat post clamp. The lock nuts hold the helical cam mechanism (you are right dafydd) in place, if I move them out, the mechanism gets loose.
But the spacer should push the whole mechanism out. It's late and I am tired so this will have to wait until Saturday. I will post results then.
Also, since it was rubbing on the big ring, I never moved it to the small ring. I just did and it pushed the chain off the small ring, moving it out with the spacer should remedy that problem too.