I mounted my sidescan / down imagining transducer as shown. Not sure if the height is causing interference. Is this location acceptable or should it be lower. Any help / advice would be appreciated.

It may just be the angle of the picture but it does not look level to me. Looks like the back is tilted up a good bit

With the transducer in that location,you will be recording echos from the inside of the port side of the jackplate. Those echos will show as several vertical lines on the left side of the Side Scan view near the centerline.

The correct attitude of a transducer that does the imaging technology is parallel to the water's surface at scanning speed.

I think its actually pretty level with the water, its just a bad angle on the picture. I will double check and make sure its level.

so from Wayne's post it sounds like I should relocate it?

Your best result is going to be using a jack plate bottom cover and a transducer mount from Transducer Shield & Saver. They make mounts and wedges for specific transducers and that will give you the correct angle

Some don't have an issue with those lines and just ignore them once they understand the source.

A hole shot plate or some cover on the bottom of the jackplate will eliminate them.
Due to the length of that transducer, you just have to pay attention to the how much room you would have for attachment to a plate so the outboard will not contact it when trimmed all the way down. On the side of the jackplate or same offset you have from the hull centerline on a plate would work.

I'm fixing to mount one on my Bay Boat.

I am mounting it under the stop of the hull.

Lowrance told me that the LSS-2 transducer does not shoot straight out on each side, but rather a few degrees down to minimize noise/erroneous echoes.

I would listen to those that have already mounted/experimented for best results.