Thanks for the replies guys! Finally got it off! We were actually able to fit a a hacksaw between the spacer and the bracket and saw the first bolt off. Then took some vice grips and unscrewed the bolt. Then turned the bracket on the other bolt abit and it loosened enough to back it out with an extractor. No damage to the spacers, bracket or timing cover. Think I'm going to get some different bolts that will fit the bracket and cover. What should I use and what head type can I use so this doesn't happen again?
Wait, I don't understand how you had a gap between the bracket and spacer? Was the bolt loose already? Because there should be no gap.