"Is there supposed to be an extension between the lock shaft and the latch or did the dealer order us the wrong lock?"
There are two (2) different shafts;
1984-88 SHAFT, rear compartment lid lock cylinder
20166681 $0.30
1986-88 (GT) SHAFT, rear compartment lid lock cylinder
20585893 $0.30
There are also three (3) different lock cylinders;
1984-86 CYLINDER, rear compartment lid 20496710 $4.10 1986 CYLINDER, rear compartment lid 20496717 $4.00 1987 CYLINDER, rear compartment lid 9632767 $4.05
From: Scott Backer