arsprod,
Have you considered using a larger diameter spacer for your rack? The larger outside diameter of the spacer gives the rack a bit more support and lessens the flexing of the bolt in its fixture. More of the stress is transferred to the frame over a slightly larger space than the thin one pictured.
Admittedly, there is not much frame space to work with and the amount of stress from the rack is higher because of the bolt size, but a larger area for the rack to grip is an advantage. Just my thoughts, MH