What is the minimum safe gap berween leads on a 240 volt oven bake element?
I would double check this element, is it possible you received one that's mislabelled?  

I haven't worked on a stove in a long time but I was under the impression that the distance between terminals was a critical dimension for a part to fit properly.  

The amazon page for the replacement part shows the distance for that part as 1-1/4" which pretty much agrees with your measurement.   

Amazon - ERB44X5082



And looking at a GE replacement part on Amazon, that looks like about 1-1/4" too... 

Amazon - GE WB44X5082 Bake Element