A suitable spacer should work fine and a better idea that trying to shorten the distributor itself. If you ever replace the head you can just leave the shim out.
What I’m not sure of is what locates the drive gear in the first place? Surely that has also decreased by the same amount …or maybe not. If the head is simply flat then you can shave it to your heart’s content and it makes no difference at all, other than lowering the distributor too far. So, perhaps, the 0.020” movement IS the amount of gear float.
But, if the distributor was been too low for a while, forcing the gear into the block, then it may have “machined” the bore deeper. In which case, a shim UNDER the gear might be required. Just more food for thought.