Mufler Fitting
From the sounds of it you have three options. Listed from easiest to most difficult.
1. Get a dremel and grind out the cowl a little more. The muff. is under the head anyway. You really won't notice it when the plane is trolling around the sky.
2. Try a different muffler.
3. Remove the muff. and carefully grind off what you don't like-keeping very close tabs on the thickness of the area you're working on.
Sounds like a Slimline. They do have a little extra AL at the point your talking about. You can try grinding but, be careful.