Get the alternator mounted first, then worry about the belts. There are 2 long mounting bolts. Put one of them on first (do not tighten), then use a pry bar to line up the second bolt.

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85 300D turbo pristine w 157k when purchased 167,870 July 2025
83 300 D turbo 297K runs great. SOLD!
83 240D 4 spd manual- parted out then junked

I've tried that, as I said I keep hitting the water outlet with the bracket.

Without seeing it in person or good pics, it's hard to help. Best I can suggest is compare the old alt and the new and determine why the new alt is interfering and use your best judgement to come up with a solution.

Is there a bushing (on one of the mount bolt holes) that gets pushed in that needs to be pushed back out (with a bolt+ washers + nut)? On a VW with Bosch alt I need to do that but I do not remember if that's the same in a W123.

__________________
85 300D turbo pristine w 157k when purchased 167,870 July 2025
83 300 D turbo 297K runs great. SOLD!
83 240D 4 spd manual- parted out then junked