I'm not sure if it's funny or sad that no one has even attempted to answer the question yet. I'm sure you've seen the instructions on Blichmann's site:
To install yourself, you'll need to punch/drill a 13/16 hole in your pot or cooler. A 7/8" hole will work, but it's a little on the big side. We recommend using a step drill or a Greenlee knock-out punch. A great source for these is McMaster.com . The step drill is part number 8841A24 (89315A42 for TiN coating) or a punch 3449A999 - requires a 3/8" pilot hole. This particular punch (Greenlee model 730BB) is special order with a 3 day lead time. Slug-Buster types are available in their catalog but do not work well in this application. When drilling stainless steel a moderate to slow speed is best to avoid overheating the tool. While hole saws will also work, they are difficult to use in stainless sheet metal.
As far as distance from the top, I would say an inch or two below the lip would be good. You wouldn't want the lid to interfere with the function of the sparge arm (if you keep the lid on during sparge), but also don't want to have a big mash (filled almost to capacity) and have the mash itself interfere with the arm's function. If I recall correctly, you adjust the sparge arm according to the size of your mash. I though there was some type of cotter pin to adjust the arm up or down. I'm not sure if the absolute position is super critical because you can adjust the arm.
If all else fails, just write them and tell them which kettle you have. I'm sure they'll help you out,
