Alright I'm home and I took some pictures real quick to help illustrate the situation.
The dimples on the pedal, arm, and corresponding mounts match as they should to pass inspection:
The rear arm is now tightened so tightly that the rear brake is fully engaged with NO pressure on pedal. There is NO slack in this pedal at all. Even fully up it is completely engaged.
I can't spin the rear wheel at all, even with two hands.
But... I can still put enough pressure down on the brake pedal with just my hand to make it touch teh exhaust
so the problem is, I can't actually make it tight enough to keep it off the pipe.
I tried adjusting pedals so they're out of the safety inspection range and I can keep it off the exhaust that way but it presents 2 problems:
1) the pedal is impossibly uncomfortable to operate because it's not horizontal, it's actually sticking up about 8º (edit: you have to remove or flip foot pedal to allow this) and
2) it fails inspection.