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Weird! The decoder installed in your model, and the chassiss itself are identical to the one in Spookshow's SD35, and he doesn't mention anything about the fit (or coupler height) issue.
I had to work the shell on the Cargill 606 SD35 to clear the mylar caps. There is room, but its tedious work that has risk. All good now. Firm report when shell locks down and enough clearance to not lose contact with chassis.
I stand corrected on the caps. I ended up using a pencil grinder with a Dremel bit similar to an endmill and removing about .020" from the inside roof. I lowered the decoder by removing the insulating panel under it but retaining the portion of it that isolates the contact terminals. That yielded another .030" I contacted Don @ Atlas in June when it arrived about a decoder, he said it takes a 58925 Nano E24. When i asked about a board for that decoder he was confused and asked for pictures. His explanation was China changed the design without telling him. This was a dc sound ready unit. I did a trial fit with a 58721 from a GP20 which worked but discovered the clearance issue. Don had no solution and said I Should return it for a refund. I rolled the dice and after a Kato wheel swap, .030" Fiber optic light pipe from aux1 LED to the nose headlight and the fitting mods it is a runner. I'll try to get some pictures posted
I forwarded a link to Atlas asking about that board and the answer was they had no way of knowing what it was without part # and suggested I ask for a refund.
@peteski mentions in https://www.therailwire.net/forum/index.php?topic=58111.msg821900#msg821900 that a ESU 58721 LokSound 5 Decoder could replace the connector board. Has anyone tried one of these on an SD 35? I would not want spend another $100 on one if it won't solve the problem, not feeling so lucky right now. Seems to me if there was a proven option that Atlas would suggest it. Then again...Not sure I understand what is involved in using the connector decoder but has anyone successfully used that option on an SD 35?