Randy's Ring and Pinion has a great instruction manual for doing this. I found it years ago and have used it a couple times with good success.
It's here if you want to double check your work.
https://www.randysworldwide.com/wp-c...l_Complete.pdf
I'm torn. I look at the pattern and think you might have the pinion a touch too low. But, it also looks like it might be good.
I prefer to look at the teeth that the marking compound was transferred to versus where it was removed from. I'm looking at your drive side, so the top of the picture, and it appears you're just a touch away from having the pinion up high enough. It looks like the compound is getting cut off by the heel of the ring gear.
If you haven't tried creating a pattern with the pinion up higher than you have it now, I would. As much of a paint as this whole process is, I prefer to take my time while it's all apart.
My only other advice is to be clean with the marking compound when you apply it. Do your best to make sure it's only on the faces of the ring gear and not all over the toe. For me, this has always helped make clean markings and identify when compound has marked where it definitely shouldn't be.
Good luck.