I had exactly the same with mine and i did the same as Towed, i just painted the chassis rail. In my case i painted it black and it looked fine!
I did talk to GaryJ about this a long while ago and originally the sides were both meant to lip under the chassis rail. Some did, some didn't and we always wondered if there were differences on the later cars as '66' was based on an early Herald and that was fine?
But I agree with now legendary saying "you can't look at both sides at the same time"
