And you're looking at the correct side of the template. Punch the holes before you drill to help keep bit from walking. Don't just measure twice, cut once, measure about 4 times, 'cause if you screw this up, it's a more than a minor inconvenience to fix.
I used an 1/8" bit, then 1/4" bit, then used a step bit to increase the size. Actually broke the tip off of the step bit, which worked better because it kept me from drilling into the headers. Finished it up with the 17/32" from Dazecars, worked like a charm and if there is any slop in the holes, I can't tell it.
I thought I had read (in Branda catalog I think) that after doing the drop, use about half the shims that were in there before to get you to the alignment shop. Anybody care to say how correct that is?