How to insert hinge in assembly properly

[durablack2]

Hello,
I am trying to insert a hinge into an assembly so that a toolbox lid can be opened. The problem I am having is I cannot seem to figure out how to mate the hinge correctly so that when the toolbox lid opens, the hinge allows proper movement. Right now I have it close (I think). When the lid opens, the hinge hinges a little, but the bottom part of the hinge moves down in the "Y" direction. I have tried numerous ways to fix the hinge but when I do it seems that the lid will no longer open.... Can someone help out with this? See attached for the zip file of the assembly.
Thanks

 

[JMirisola]

After inserting and mating the hinge, make sure you set it as a flexible sub-assembly.

Jeff Mirisola, CSWE
My Blog

 

[CorBlimeyLimey]

Delete Coincident27 mate.
Add a vertical distance mate between the fixed leaf of the hinge and the toolbox.

FYI ... There is material interference between the lid and toolbox (hinge side) when the lid is closed.