Thats exactly what was wrong with my first Tedd's assmebled, ready to install flywheel/rod set. Worst thing is I didn't check the rod length until I had the crankcase and gearcase completly build and sealed up.
When I got the second set the rod side clearence was at least .100" and the wrist pin clearence was about .005". The machinist I had to redo them said the rods were used. He ended up using the rods again but replaced the races, wrist pin bushings and used shovelhead flywheel side shims to tighten the side clearence.