Thanks for the responses and suggestions so far.
I did a little experimenting to find out which of the three pieces (AMD fender, GM fender extension, or GM valance) might be the culprit.
As it was suggested, I am certain it is the AMD fender that is not shaped right where it meets the top of the valance.
I lined up the valance I am using (the black one) so it was completely flush the fender extension. When you do that, the top corner of the valance sticks out a quarter inch past the fender and it also about an 1/8 inch lower than the fender. Exactly the same results on both sides.
As a double check, I took the original GM valance from my car that I am not using ( the beat up blue one ) and put that on the car lined up completely flush with the fender extension. The results were exaclty the same.
As a triple check, I took an old GM fender and GM fender extention I had and bolted them together. Then I took the valance I am using and checked the fit against those. The fit was perfect!. The valance was flush to both the fender extension and fender the entire length. ( I have no pictures of that ).
Scott, to answer your question, yes, the car is still at the body shop. We have talked about different solutions but some second opinions can't hurt.........So I am wondering if anyone else has had this problem and how they remedied it?
Just some info to throw in, my headlight bezels fit pretty good into the AMD fenders as they sit now. If the fender gets reformed by pulled down and forward to meet the valance when the valance is lined up properly with the fender extension, the bezel is going to fit worse. Too much space height wise.