[RiovistaAndy]

You can purchase a longer bit. I took a quick look at the MLCS catalog and they have a straight bit with a .5" shank that is 1.25" long. I'm just a hobby woodworker and don't have a lot of router experience but it seems like lot of material you trying to remove. I think I get a longer bit and try doing it in a couple of passes. I'm sure someone with have a better plan.

I believe the OPs Ryobi has a 1/4" collet. At least all that I've seen. As for a 11/2" bit w/1/4" Shank is asking for problems. These are not sturdy routers to begin with. I've had one for years. I don't use it as much as my smaller routers.

 

[RiovistaAndy]

I am running into the below issue. I made a template out of 1/4 inch MDF. I then attached the double sided tape to a piece of 3/4 inch plywood and attached the template on top of that. I have a fixed base router. When I try to route I am encountering the below issue where the router face plate is not flat on the template because the offset piece is blocking the cut of the router bit. Can someone help with this? Should the guide of the guide bushing be smaller or larger than the router bit?
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Now that you posted a photo I may be able to help you..
For one thing you have the wrong bushing in your router as it appears to protrude 1/2" below your router base!! The bushing should be the same highth or a bit less than the thickness of your template.
Second problem, why aren't you simply attach your template to you work piece. If it is to provide clearance for the bushing, See Above...If it's not then find a way to do so...
Hope this helped.

Yes I have a Ryobi router table but the questions above are related to hand routing. Would I not have that issue if I used the table?

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Yes