Dip stick tube.
The upper tube should fully seat to the "flange", as you're refering to it. Maybe there's something keeping the "lower" tube from seating; pull it out also and take a look. Otherwise, shorten the upper tube below the "flange" the needed amount, deform it as others have suggested, and install it. Someone has been there before you on that motor, and did something that's created this problem for you. I found a piece of rubber once in the pan of an engine that sure looked like a rubber dental dam dentists use to isolate the tooth they're working on. Never did figure that one out.