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You should be looking at the area above that rubber pad and beneath the engine oil pan. Half an inch is optimistic but I have seen it before, 1/4-3/8 is more common. I always look right where the oil pan starts to curve down towards the sump, look in that area and see what you see. A clunk noise from the engine mounts would be rather unusual and while you may or may not still need the mounts you are correct in assuming that they will not fix your clunk issue. Bad mounts are usually more associated with piss poor idle quality among other things, especially the later model hydro mounts.
Mark
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