Thanks for the help RedNeckZ!
I have fixed it!
The hole on the clutch peddle where the the master cylinder rod connects was very oval shaped. I filled it in with the welder and drilled a new hole.
Then I set the peddle to the correct height and adjusted the master cylinder rod length with the proper amount of free play.
Now it shifts into reverse with no grinding at all!
Just for reference, the TOB Collar PN 30501-K0404 is 24mm. According to another post I found, this is the correct height for a 2+2 non turbo.
Also, the only difference between Luk Clutch kit PN 06-906 and 06-901 is that 06-901 includes a collar and 06-906 does not. You have to reuse your old one or buy a new one.
Thanks,
Kevin