CRSMP5: I made my own downpipe from the top half of the MKIII, and then made the rest. There is about 3/4" of clearance over the steering rack, and I made a note today to take a look at it and see if it was hitting and I did not see any indication of rubbing, but now that you mention it, maybe it's only hitting just enough to make contact, and not really make any marks. I'm going to take a better look at that tomorrow though because that would clearly make the problem I'm encountering.
rodpaslow: After more thought on it, I dismissed the idea of the MKIII subframe because at this point I really don't think it is a mount issue anymore (and at idle it's actually nice and smooth now). I had thought that the subframes from the MKIII and MKII were a fit, and that the control arms/tie rods were the actual pieces that were longer to make the wider track. You learn something new all the time! Also, I am using the same axles as before, that have been in the car from day one, as well as the transmission. I had thought about a bad/binding axle, but usually I've had axles fail the other way around (when accelerating on the highway in fifth, but not only in first and second gears)
Thanks for the input guys!!! I'm really leaning towards the downpipe now, and I'm going to look further into it tomorrow, or at least put some grease pen marks on it and see if they get marked up.