Hi Andy - yeah it sounds like you have the 12th fret hump but not to worry because you can't know the extent of it, for better or worse, until you fit the neck better and set the proper neck angle. Once you do that you will know how much of the fret board AND upper bout will need to be trued up so that the fret board extension sits flush and flat. Remember too that some drop off in the fret board extension from the 12th to the sound hole is desirable. On a 14 fret I shoot for .015 drop off at the last fret at the sound hole.
Once you fit the neck better and set the neck angle so that you comes in just over the bridge then you can true up the top and fret board extension for a better fit.
I would approach it like this:
1) Set the neck angle correctly and observe what you have left that needs to fit better in respect to the upper bout and fret board extension. Here is a toot that may be helpful in setting the neck angle in respect to the bridge:
http://www.luthiersforum.com/forum/viewtopic.php?f=10102&t=15022%222) Once the neck angle is set truing up the upper bout, and there are methods that use a pivoting sanding surface, would be my next step. If indeed it works out that you still have a .050 gap, but lets see first after setting the neck angle, .050 is too much IMHO to remove from the top's upper bout. I would then flatten and true up the upper bout to some degree but not as much as would remove .050 from the top.
3) Relieve the bottom of the fret board extension so that it fits flat or with the mentioned drop off to get the last part of the fit right.
Some builders will build in a flat in the upper bout area. This is what I do and to do so I use an upper transverse brace that is not radisued. With a 25' dome on the top and a flat upper bout I don't get the hump. Another method is to use less of a radius on the upper transverse brace or just flatten the middle of the brace where the fret board extension will sit.