Specialized Transition headset dust cap gap
 

Putting together an 08 Specialized Transition, and noticed there is a gap between the frame and the headset dust cap....attached is a photo...is this gap normal?

http://www.pugliesecreative.com/temp/DSC00223.JPG

No, that gap is not normal.

I'd put a 2mm or a 2.5mm headset spacer between your brake cable carrier and the spacer that's already there and then install your stem and stem cap as normal. Let your stem cap do the work of compressing the headset to spec. That brake cable carrier isn't designed for that job, don't rely on it for that.

Another possibility is that the star nut (or compression plug) is not set deep enough.