The rudder shaft should go into the bottom of the hull with no washers, this to limit the chance of getting weed in the space between the rudder and the hull. If you are a perfectionist, you can sand away the small bits of excess material around the shaft to get a precise fit. Use the washers at the top to fill any space between the top of the rudder sleeve and the rudder plate, such that there is no play when the nut is tight. The nut should be tight enough to draw the rudder plate onto the square portion of the rudder shaft. It is a lock-tight nut so does not need to be over tightened.
The shock cord on the cables is only there to keep the cables taught, not to straighten the rudder.
Hope this helps.
FENN Bluefin, XT, Swordfish S
Author and publisher at South Easter Communications of books in the SURFSKI series, aimed at recreational to advanced paddlers. Look at the Facebook page Surfski know-how and visit www.lulu.com/spotlight/southeastercommunications