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On the first level margin-left:660px got accepted as a solution even though the peg barely overlaps.

That's literally the challenge. Get the peg to overlap the holes. That's it. It literally says this on the first page:

> for each peg, there is a hole, and each peg must overlap with its corresponding hole

Sure, I just assumed that the peg should overlap the entire hole and not just by a couple of pixels. No need to be salty about it.