Before you give up, I'd suggest milling just a smidgen of material off the top of the tool, so the clamp can move downward a bit. It kinda looks like the top of the steel is either even with the top of the insert, or maybe just a slight bit high, allowing the movement you observed. The support beneath the insert looks OK to me.
And by the way, thanks for the idea. I've always thought brazed carbide tools were kind of wasteful. Now I have something I can do with them when I pull a stupid goof!