Installing coilovers and the driver front shock is coming through the top hat as pictured. What is happening? This happens when the car is lowered off of the jack stands and the shock compresses.

 

it looks almost as if coilover is not compressed when assembled or spring is way short. heck.. it may not be coilover at all.
meaning.. there aren't enough info.
post what make model of coilover, perhaps picture of entire coilover or below top hat, if it's happening only for driver front, perhaps comparison photo between passenger side, etc..

 

Resolved!

I must have missed something in the swap. There was an additional bumper and washer that goes below the top hat. Once that was installed properly everything was good to go.

 

Sounds like you're fixed now... and just checking, but did you preload the suspension all around for your install?

 

Yes....I think

 

I may have not done the preload correctly on my kw V3.

Am I supposed to compress the spring from the bottom with a jack and then set the height?

 

Jacking up the wheel to ride height and tightening everything is more for your control arm bushings so they don't tear, spring preload on the coilover is done with the coilover out of the car. Snug up the spring so there's no slop between the spring and the seats and it's preloaded. Pretty straightforward.

Increasing spring preload increases resting spring rate, and overdoing it can also increase chances of spring binding if the suspension bottoms out.

 

Installing coilovers, when you don't know how to assemble them properly, don't know how to preload them, don't know to clock the bushings, and probably don't know how to adjust them, is just going to lead to a car that handles worse than it did on the old stock suspension.

Get someone knowledgeable to assist you, and use it as a learning opportunity.

 

People aren't born knowing, can't rip on people for not knowing and asking questions. The more people learn the better the community as a whole.