It seems like it is too far outboard. Any suggestions on how to move it in so that the angle between the cable stalk and the pulley is the same as the angle between the pulley and the FD?
Well you could remove the bolt and pulley assembly first. Then start removing material from the threaded base until it would sit in line with where you think it should be. You'll want to be sure to remove the material in a fashion that keeps the surface area square with the threads. A rasp type file and a steady hand would be my choice followed by a plug tap to clean the filled threads.
Install the pulley on the other side. It's reversible depending on the derailleur used. I have them on the other side on the trainer bikes.
If that doesn't give you a smooth shift you can do it old school and go around the bb-shell with a cable liner which works just fine; only a little more tricky to get the tension tight.
Looks like this must be a common problem. I just looked at the S40 I got 3 weeks ago, and it has the same issue. Guess I will need to figure out how to get it re-installed. Doug Kline's pictures were very clear!