Tone arm holes do not line up - best way to attach TT?

The sound is amazing but the complexities are daunting.

Its not that bad. It only seems like there are a lot of things to learn because right now you haven't learned many of them and so they seem to be coming at you from all sides. Its really not that many though and each one of them is really very simple once you break it down. 

Also while going through the learning curve it will serve you well to keep in mind what you already know: The sound is amazing! 

I have been buying, and playing, and modifying, and even building turntables since 1976. In all that time I have yet to hear the one that didn't sound amazing. There was even one time a gramophone in an antique store we put a 78 on and even that was amazing! 

I bring this up because too many audiophiles obsess so much on doing it perfect they miss out on a lot of opportunities to Just Do It! You could for example cut any old piece of wood up, put some holes in it, screw it to your table, and mount your arm to that. Just to hear how it sounds like that. Won't be much work (he said, having everything just sitting there in his shop all ready to go) and you will gain untold experience just doing it. And hearing it. 

Then send it back. Unless you fall in love. Which you might. In which case you go looking for better wood to make it all pretty and nice. Or send it back anyway figuring the shorter one will be all pretty and nice, and probably sound pretty much the same. Which you will never know- unless you try.

I read the thread, and I am still a bit puzzled as to the nature of your problem, because the Reed tonearms do not require drilling a large diameter hole to accommodate a vertical shaft.  They are all top-mounted, so far as I know. Which is to say they have a flat base that sits entirely on top of the tonearm mount board.  So, it seems to me that if your tonearm mounting board permits the greater P2S distance of a 12-inch tonearm vs your previous shorter tonearms, then you cannot have a problem, save the problem of drilling three small screw holes for the base of the Reed in a new location.  On the other hand, if the mounting board does not have space far enough away from the spindle to mount a 12-incher allowing for proper P2S, then you have a bigger problem than just the fact that the existing holes are in the wrong place; you would need somehow to extend the mounting board in that direction.  Which is it? Or what am I missing?

Thanks for the encouragement. I was beginning to get the impression that the vinyl hobby was for machinist who loved to tinker and then played music when they got bored :) 

On a more serious note, I did, in fact, use a piece of walnut and cantilevered it so the arm could go out as far as it needed to so that the cart would line up with the grid. The pivot-to-spindle range is a few inches outside the spec but there is a template provided by Reed that measures the "resting arm" position of the tone arm to the spindle and that matches. I set the weight at 2 grams per spec and spun an album. The needle flew across the album toward the spindle gliding on top of the grooves. I rechecked the weight 3 times each time the exact same thing happened. I increased the weight incrementally making it heavier until it engaged in the groove and of course it sounded horrible. 

I did confirm that the TT will accommodate a 12" arm. If that is the case, I should not need to have a cantilever.  But clearly the arm when seated on the TT normal position was not in adjustment range for the cart ... If I only use one bolt to attach the cart to the arm, then it will adjust but I am sure it needs both points of attachment. 

This might be related ... I am having trouble setting the height of the arm. It has an adjustment up and down almost 1/2 inch on the arm controls. If I lower it enough for the arm to be parallel per my gauge, then the arm is too low and the lift does not raise it above the platter. So I raised it up enough so that it clears the platter but it is about 1 mm off of parallel.

Could the problem be that I need to install the arm higher than the normal height for the table? The walnut piece is at the same height as the built-in arm holder. 

On a related note, Reed specific, the arm sits in a gyro type set up with 3 tiny pins that rest in 3 tiny sockets. I can adjust the height of the pins slightly with an allen wrench. The issue is that the slightest touch throws the pins out of the sockets. I thought tightening them would make the system less fragile but it does not seem to. Returning the arm to the holder regardless of how gentle, often throws the pins out of socket. It does not seem likely that this is normal. This is probably Reed specific and I should reach out to them. In any case, all my experiments above were with the pins correctly in the sockets.

So between the table, phono stage, arm, cart and record cleaner, I have a small fortune into little vinyl. I cannot play an album. Any help would be greatly appreciated. 

Do you have the Reed 3P manual?  If not - download here -  Bedienungsanleitung-Tonarm-Reed-3P.pdf (bohne-audio.com) and follow directions accordingly.  

When you say the turntable can handle a 12" tonearm - does it have an adjustable armboard - each tonearm has a specific mounting pattern.  

For the tonearm to fit, the pivot to spindle distance must be set to a distance of  295.6mm (roundup to 296mm).  Refer to the above manual to determine the pivot point - Figure 5 Item 1.  Make sure you have all adjustments initially set as specified in the manual - including Anti-Skate; too little of which may cause the tonearm to fly to the spindle.  

Something is "off", if you set the VTF to 2 g (for what cartridge?) and the tonearm flies across the grooves toward the spindle. Any VTF greater than 2g is very unusual (high) for most of the commonly used MC cartridges. As Antinn says, check anti-skate. Have you applied any anti-skate force at all? But even with zero AS, I would be surprised that the stylus cannot sit down in the groove well enough to avoid the issue you describe. Your best bet might be to consult a local friend who can actually visit your home and help you figure it out. Or the dealer that sold you all that expensive stuff. Don’t give up on it.
EDIT.  It just occurred to me that you also ought to check the routing of the wires that exit the arm wand at the rear and eventually provide outputs to the phono stage.  If the wires at the arm wand exit hole are twisted or torqued in some way, they could be responsible for an excessive side force that would be pulling your tonearm inward toward the spindle.  But Reed tonearms are well designed to avoid that issue, so this is a shot in the dark.