I did all of the above and agree the bracket should pull the exhaust in (the mounting for the exhaust can is without tightening the bracket directly above the frame) so with it in this position to start tightening can only push away from the frame not towards. So it seems the welder didn't line the two sections up correctly when he put the washer in and welded the two pieces back together...The rear exhaust bracket is stationary and doesn't move. So when you're tightening the exhaust back there, it should be pulling the exhaust in toward the bike...not pushing it out. If it was pushing it out back there when tightening, the other end of the exhaust at the head would be getting closer to the head.
You could also try loosening the exhaust at the rear bracket, then tightening the exhaust at the heads to spec (17 lb.ft. torque) and then tightening the exhaust at the rear.