Magellan, I would call the Muzzy guys, They are going to be a lot more responsive to phone calls than Email. I asked the same thing of the local speed shop where I got my header wrap, as when I ordered the first stuff online the instructions said to do as you mentioned, 1/2" overlap. That's what you want to do on the first layer, yes, but according to the guy at the local speed shop where I got the last roll, he said it makes no difference if you want to add another layer. He's been around automotive speed shop applications for decades, but he has never heard any problems with double wrapping pipes.
Again though, I would be calling Muzzy directly point them to the email, or the thread, and let them check it out. From talking in person to the R&D and the marketing guy I think they will stand behind their product 100%, even if it means sending you another pipe. Your clearance issues don't make sense to me, I have plenty of clearance on my pipes...
Terror-x's cooments about working hte pipes upwards is exactly what the R&D guy told me about installing mine, Sorry I did not make that clearer.
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