I've been away for a while with hunting and getting ready for winter. My wife keeps making plans for my spare time..lol.
Thats cool you got the parts from RTG. The front bushing probably seems too large because you most likely need to trim back the front, but first we need to determine how much needs trimmed. We'll get to that shortly. Looks like you have plenty on material in the rear of the shroud.
That said, everyone does these a bit different, but I'll tell you the order in which I build;
I'd start by degreasing the parts kit. After that grind the slag from the torch off the camming area if you have any that keeps you from being able to fit the C/P on. Fit your camming pieces onto the shroud (temporarily). You may have some warpage from the torch cut/demilling, you want the camming piece to fit tight though. If you do need to file a little to get it fit, do not file on the camming piece, file the shroud only where needed. The camming pieces are very hard and etching them by filing or grinding could cause them to fracture later.
With the camming piece in place and a temp rivet slipped in, the camming peice will be the main source of your measuring. This will allow you to put your barrel in in order to figure out how much to trim from the front of the shroud. The camming piece will be a consistent locating point to measure from later too. As a matter of preference I don't trim the rear of the shroud till I get the front done...so I wouldn't focus too much on that at the moment.
Here is a good pic (not mine) of some measuring points BTW;
The Yugo shrouds I have used have been plenty long enough when combined with the German MG3 bushing, in fact they have required trimming to get them short enough to specs. Yours looks like it should be long enough. Next is to check it.
Cleaning up the inside after removal if needed;
Trimming and fitting the shroud for the front bushing;
Keeping the front of the shroud's face flat and square for the barrel bushing is important to avoid barrel binding. When squaring I used a piece of flat glass, standing it up. But first we need to measure, see pics below for that.
You can check it with a level as well using the rear sight block, which is one of the few flat areas on this shroud you can locate off of with a level.
Its not a super accurate method and you can only check it up and down, but it gives you an idea on how square you are on the front edge. There are better ways if you have the tools, but I'll show you what works for me with what I have to work with using hand tools;

Using a belt sander flipped around in my vise;

^Its important to pay attention not to tip while sanding and keep checking while trying to get close to the amount you need to trim off.
There are several ways of fitting/trimming it, I like to check it several ways to make sure I'm within specs.

^You can measure from the barrel stop inside the gun to the front edge, which should be close to 19.5”.
Another method, one I like to use to double check before doing any welding is you can place the bushing into the shroud (the MG3 type has a lip that fits nearly perfect into the Yugo opening). Install a barrel bearing into the bushing's lugs and pop your barrel into the camming piece and latch the door. Hold the new bushing in place and using gravity let the barrel move forward to the forward stop. Tilt it back and let it slide to the rear stop. You should be getting 13mm extended and 8mm retracted. This particular spec is only valid using the 8mm type bearing. The .308 bearing in longer and with throw this spec off. Though you can switch to the MG3 type barrel bearing later this should be noted. You just don't want to set up and trim using the MG3 type bearing unless you use an offset number, so just fit it with the 8mm bearing for now. Like most things on this build if you are going to err is better to be a tad on the long side than short.
Once you are sure you are in specs and the barrel is gliding freely without binding, tilting it back and forth, remove the barrel and bearing.
Grind a bevel for the weld around both the the bushing and the shroud. Taking a piece of threaded rod, some washers or something to draw them together and hold them tightly we are ready to weld. I like to cover the surrounding weld area with some scrape metal or aluminum foil. When using a wire welder like mine this keeps the clean-up spatter to a minimum. Also make sure you have the bushing oriented correctly. Looking at it from the front the slot on the front edge of the MG3 bushing should be at 3 o'clock;
More than anything you want to avoid warpage when welding these guns so keeping excessive heat to a minimum is a must. Tack weld the Bushing on opposite sides (4). Now connect the dots, only going about a 1/2” on one side side then the other and so on. Allow it to cool down till you can touch it after a few welds to keep from over heating. Think of stitch welding like torquing a head bolt, allowing the contracting metal to to pull evenly. You do not want a continuous weld all at once in order to avoid warpage. This is the same technique you will be using on the receiver too BTW.
If you kept it straight and in specs earlier it should stay that way when its done if you are careful. Clean up your welds on the grinder and sander. Don't grind it flat or you will loose strength. The German post war front has exposed welds for this reason.
After a bit of sanding;

I put some cold blue on it just to see how it would look though this is not the time to put a on finish.

I'm a better grinder than a welder...lol In the end it turned out decent though.
That should wrap up the front other than the front sight which we can get to next.