installing 38 rear sprocket

[scotts96fast]

I just installed a 38 rear sprocket on a '96.The chain is rubbing on the hub and the washer plates and nuts that holds the sprocket on.The chain will not sit all the way on the sprocket.I have a new atv x-ring chain which is worse than my old DID 520 0-ring chain.How do you guys run such a small gear and not have problems???People run a 37 and that's going to be worse!!

 

I did grind the hub,but the chain still hits that...Once I notice the problem with the washer plates and nuts I stopped.Any ideas

[tree454]

Try going one up on the front, it is nearly the same a going down 3 on the rear.