I adjusted the handlebar lever all of the way IN (it was almost all the OUT, before I started this thread).
I had already screwed in the lower adjusting screw as you told me. I had to back it out a little to get some free play in the cable.
It still hits the frame, but not as much. I guess I could ride it this way.
edit: My thinnest feeler gauge (0.05mm) does not fit. If I allow it to be pulled in, there is an audible "thunk" when I pull it out.
![Sad :(](./images/smilies/icon_e_sad.gif)
But I am going to go buy a gallon of gas, anyway.