In V carve we set the clearance to 0.250 not 0.7874 that you had it set on. Go back to the V Carve program and change it to 0.250 and recalculate the program.
While running a program the safe Z has no effect only when Go to Zero.
In the sprocket txt you did have the clearance gap set at 0.250.
If you open a program that you used before and save it then V Carve will remember many of the settings from that program. If you open a program that someone else wrote then write one of your own you have to check if any of the settings have changed.
Every time you start a new V Carve file you set up the material size, where the Z zero is, and where the X and Y zero is located. When you are ready to compute the tool path the first thin you should do is check the material settings on the right hand side at the top. Make sure you have all the settings where they should be for your machine. This is where you set the clearance gap, material thickness, and Z zero.
Until you are comfortable with the program you should check this every time before calculating any tool path.
Ray