We recently installed a set of indiglo gauges on a Mustang GT at the shop, and ran into this same problem. He came in three times complaining of gauges sticking, the guys removed them, lifted the needles, cut some material around the needle's bases, etc... nothing seemed to help.
Finally I took them out myself and determined that the gauges worked fine when the cluster was cool and laying down, but once installed upright in the dash, the faces fell forward. I applied some 3M foam tape to the back side of the black divider that sits over the gauges. I layered about three pieces in different spots around the gauges and didn't remove the backing from the tape so the faces wouldn't stick to the divider. This held the gauges against the back of the cluster so they didn't fall forward and interfere with the needles. It worked.
One thing though: these gauges were a one-piece unit, and I don't know if this will do you any good with a multi-piece kit. Anyway, food for thought...
