Urwumpe is right... Here is a pic of Apollo CM (Skylab 3) :
When assembled, you can see a bit of the shield between the SM and the CM (Apollo 15, pic from the LM) :
So the diameter of the shield is slightly larger than the SM or the CM, that's normal.
---------- Post added at 07:24 PM ---------- Previous post was at 07:09 PM ----------
The edges of the capsule are jutting down into the heatshield, instead of blending into it.
I see... I think you should add more faces to the capsule, it would help. 24 is a bit low, try 48 or even 60. The more faces, the smoother the model (and also the more demanding for the display hardware). The other problem is that the shield and the capsule don't use the same method to organize their faces, so they can't match perfectly anyway. In such cases, I would try to add another "cut" cone section right over the junction, to hide it. It must be very very close from the meshes. Sometimes tricks like this are necessary.