Craftsman Industrial Dovetail Fixture: Alignment of the Templates

I'm attempting to cut a Half Blind Flush Joint. I cannot get the template bracket to move forward to align with the front back-up board. It's short by 1/8".

Some simple things that are relevant: I'm using 3/4" width wood. The Clamping knob is loose and the adjusting knobs on both sides move freely (with 1/4" of play).

I'm assuming that the rounded knobs that the router guide slide into must by aligned with the inside surface of the board I'm cutting (the side that is exposed so that the router will first cut it).

Any help would be greatly appreciated.

Thank you