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Thank you, Christiane. I think this solved my issue.
I haven't added any additional padding. It appears the extra spacing is caused by the default dynamic content blocks with cleared content.
I'm trying to create an email with variable dynamic content blocks. For context, a lead will be imported and mapped to either one or multiple segments. I want to be able to send them an email with a generic intro and then one or multiple dynamic content blocks based on what segments they are mapped ...