I was just watching the Tony Rice Method DVD and found that he is really particular about the placement of his capo right behind the fret wire. I tend to do the same thing except for when I’m playing something with open position chords (particularly a first position B7) where the capo is in the way. In that case I’ll slip the capo back away from the fret a bit to give my hand a little more room. Do you guys do this, too, or do you just scrunch you hand up against the capo?
Capoing
I use a http://www.rainbowguitars.com/imagesproduct/mc/mc83dn-xl.jpg. After I saw An Intimate Guitar Lesson with Tony Rice and the explanation he gave as to why one should place a capo right behind the fret, I started to do it, but I started having trouble that very same B7 chord. The way I got around it was to place the capo’s tip in line with the edge of the guitar neck. That way, there’s nothing hanging over the edge of the neck to get in the way of my left hand.
Hope that made sense.
Makes sense once I looked at the link to your capo. I have a Kyser capo that would offer the same benefit, but I do like being able to slide my Paige capo over the nut when I’m not using it. I never have to worry about misplacing it. I guess the perfect capo still hasn’t been designed!
I am a scruncher. I use a Shubb, and it is manageable to do a B7, but I think I have just gotten used to it. Maybe one of these days, I’ll put up the big bucks for an Elliot, but I bet it would be even more difficult for the B7.
I can only see problems with making chords near a capo happening if the hand is positioned too closely around the neck. Many will play a guitar with the thumb pointing in the air and the web/palm part of the hand against the neck (I’m guilty of this on all instruments from time to time). Banjo players often are broke of this habit after slamming the fifth string peg with their thumbs a few times. 
A slight bending of the wrist and movement of the thumb toward the back/center of the neck should rotate the hand so as to give the fingers room/length/angle to accomplish the desired position. 
I can get my hand into B7 position with the capo tight to the fret wire, but it takes more effort. I have to angle my wrist more so that my fingers are more perpendicular to the fretboard, and that puts more of my hand into a small space. I especially notice it if I’m capoed up to the smaller frets. Guess I’m just being lazy.
I probably shouldn’t mention your picture was a dead giveaway to the possible problem… 
Yeah… don’t be copying my left hand mando position, it’s definitely a work in progress