Stabilizer Bar Not Centered In Bushing
 

While chasing down a fron end clunk when hitting potholes I noticed that my sway bar bushings were shot on one side. The front of one of the bushings was worn flat and the bar was hitting the rim of the bracket that holds the rubber bushing.
I ordered new OEM bushings and brackets. Today when trying to install them I noticed the stabilizer bar wasn't centered in the new bushing/bracket on the same side as the old one that was making noise.
What could be making it off center? I tried to get a pic but you can't tell much with my crappy phone.
The other side fits perfectly center.

Here's a decent shot. You can see the bar is right up next to the bracket.
https://cimg9.ibsrv.net/gimg/www.che...f171902491.jpg

Is your Jeep lifted several inches but still uses the stock track bar?

If so, the front axle assembly will be offset slightly to the driver's side.
That would pull the sway bar (attached to the axle with the vertical
links) over toward the driver's side and maybe cause the curve of
the sway bar to rub on the bracket.

To center the front axle of a lifted Jeep, you would need a longer (or
adjustable) track bar.

It has a 3" lift.

It's like this with the vertical links unattached. It's almost like the bar or bracket or ? has been tweaked.
Never been in an accident though from the looks of everything else. And the bracket is new.

I wish I could be there to look at it with you, but here goes.

It is possible that over a long period of time, an off-center axle
can eventually bend the ends of the sway bar. If that is the case,
the ends can be bent back, or, a sway bar of the same diameter
(probably 26mm/1.02" in your case if you have a 1999 XJ) can
easily be found in the junkyard.

Do you have the stock track bar (the kind with the socket-type
mounting to the frame bracket)? If so, the axle will not be centered
and the sway bar could be pulled over toward the driver's side.
The solution is a longer track bar.

With the links unattached, can you move the sway bar left
or right so it is centered within the frame brackets and doesn't
rub on them?

If you can so move it, then look to see if the front axle assembly
is centered relative to the frame. Maybe you can eyeball it but it
is best to measure from definite points on the frame and axle.
If it is not centered, then you need a longer track bar.

I have a stock track bar. It looks like the axle is about 1/2" off. Moving the bar left/right doesn't seem to make any diffence in how it sits in the bushing. I found a local salvage yard the has a stabilizer bar for $20, I'll give it a shot and see where I need to go from there.
Thanks!