Has anyone else had an issue with the SH4 contacting their rail mount? Contacts rail before I can get it level. Take out the grinder or no?

Yep!! On my Savage model 10 with a 20moa base in an Oryx Chassis I I had to use medium rings. The low rings caused the scope turret housing to hit the rail. I could get it to clear but it was less than a business card thickness clearance and close to a sheet of paper thickness. IMO with recoil and flex that was going to cause a potential problem. The other issue is the bell clearing when trying to adjust the scope for proper eye relief. With the proper cheek rest and getting an accurate height over bore measurement you will be fine. Hope this helps.

I mount my level so that the bubble is touching one of the indicator lines, that way I have a definitive point of reference to check, versus trying to make sure the entire bubble is in the very dead center.

It is considerably faster for me that way.

I could be wrong, but your picatinny mounted level looks way off, and I've noticed on my setups that the screw doesn't get in the way as long as it can sit in the rings. Meaning if it's not hitting anything before you level the optic, then it will fit because it is angled away enough. I believe your rifle is not sitting level in this picture, which means the scope actually has more rotation available and will work. Could be an optical illusion though?

You already have plenty of clearance for the barrel, I’d carve out a spot for it.

Or get taller rings