I ran into a similar situation a few years ago that turned into a dispute between two inspectors.
A local lodge added a bingo/meeting hall to their building.
The existing service entered the building on the North end, while the new addition, which required 200 Amps, was added to the Southern side of the building. We installed the service on the North end of the new addition, which put it about 125' from the existing service, which was upgraded from 200 to 400 Amps, for this addition.
We installed, with the approval of the utility and our inspector, a 200 Amp disconnect at the main service, and ran our feeds to the new addition.
It passed our inspector, and the utility did approve this in advance.
Another inspector, (who had a reputation of driving around finding construction sites and soliciting business from the contractors, and, if he failed there, from the building owner) informed us that it was a total violation, and he was going to do his level best to make sure it didn't pass. (After we refused to pay for his services, of course)
It did pass, without any problems after a letter from our attorney.
The whole incident did, however, sour me from using main lug only panels when the service is a distance from the entrance.
I've always wondered who was really "right" in that situation, as both inspectors cited vague parts of the code. Ours made the most sense when he pointed out the "except when approved by the utility" (or something along those lines) clause in the code.
