With the manifold and gasket in place but not bolted down, look into several of the manifold bolt holes with a flashlight and see how they line up with the threaded holes in head. It sounds like the centers of the manifold holes should be well above head centers. Significant net loss from block and heads can make additional milling required on head intake flanges. Figure net loss by totalling head and deck loss and subtracting .020 if using a comp. gasket. So say there is .025 off head and .022 off deck, subtract .020 and net loss is .027. Given the angle of the intake mount flange, supposedly the amount it needs to be reduced would be .027 X 1.4, or .039. Having just done this to my heads, using the factor, the manifold was a little lower than perfect, and if doing it all again I would use a slightly lower number than what the multiplier gives.
Rather than mill the intake flange of the heads you could do the manifold, but like guys on here told me the manifold is slaved to that engine only, and should you want to put on a diff. manifold in future it wouldnt fit.