The thrust line string goes exactly through the center of the crankshaft
area of the engine case, fore and
aft:

Also notice that the engine case is checked for level side-to-side using
a bubble level where the oil sump mounts.
The engine is also checked for level fore/aft:
I believe setting it up this way is probably the most accurate way to assure that your engine is centered on the thrust line and is properly positioned both vertically and side-to-side.
The final engine alignment issue is setting the distance of the engine from the firewall. It is important that this be correct, as it will affect future weight & balance. The October 1999 Bear-Tracks newsletter indicates that the crankshaft flange must be 58 1/2" from the datum (leading edge of the wing). (Note: The April 2000 Bear-Tracks newsletter indicates that if you are going with the heavier O-540 engine and constant speed prop, you may want to use 56 1/2". However, in a recent conversation with Bob Barrows, he indicated that they have gone back to recommending 58 1/2" for all applications, so you might want to speak with him before proceeding).
Since my wings haven't been mounted yet, I measured the distance from the spar line to the leading edge of the wing using Drawing #7 (mylar) of the plans. This distance (13 1/4") was added to the 58 1/2" for a total of 71 3/4" from the centerline of the spar.
Plumb bobs were dropped from the center of both spar attachments on the fuselage.
A long straightedge was then placed on the floor between the plumb
bobs as shown in the picture below:

A tape measure was then run along the floor from that straightedge out
past the front of the engine several inches.
A plumb bob was dropped from the front of the engine to check for proper
distance of the engine from the spar centerline:

Since I don't have the crankshaft mounted in the engine case, I measured
the distance from the crankshaft flange to the front of the engine case to
determine how much to subtract off of the 71.75" distance. It worked
out to about 70" to the front of the engine case so that was the measurement
I used.
Now that the engine is properly located and fuselage is level, we can start to build the engine mount.
For the O-360, four bushings are needed to bolt the engine mount to the fuselage.
These were made from 4130n 9/16" O.D. tube and were drilled out
to 3/8" I.D.:
When the fuselage frame was built, the engine mounting bushings were left
a little extra long for welding. These were now trimmed off with die
grinder and cut-off wheel. They were then filed until the bushing would
come into flat contact with the engine mount bushing when bolted together:

You don't want any gaps between these so file the bushing until they come
into flat contact with each other all the way around when bolted together
as shown above.
Click here to go to Engine Mount page 3