I recently bought a Whole House Surge Protector from Home Depot. Here is a link (http://products.schneider-electric.us/support/technical-library/?event=detail&oid=09008926801b6125&cat=0b00892680114412)to the manual for reference.

I read on the internet that some people suggest to keep the wires from SPD to the breaker as short as possible, under 1 foot, while other stress the location of the breaker (as close as possible to the main.

Given my panel (pictures attached) which of the two solutions would you guys recommend?

1.) If I am to place the new breaker close to the main (first picture) I will have to reposition the existing breakers.
A.) Should I shift all breakers from the right side of the panel down by two slots and make some room at the top?. not sure how much "slack" needs to be left inside the panel for the wiring.
B.) Or just extend the two top wires with a junction box (exposed, next to the panel somewhere) and route them down?

2.) Reposition the blue wire (second picture) into hole #1 or hole #2, green into hole #3to make room for the SPD as indicated.

I suggest that the cable be moved so the surge protector get installed at the lower right hand of the panel.

You can move the breakers in the panel anywhere necessary, if any wires are too short you can splice on an extension.

In this case follow the instructions that came with the unit. I took a look at the link and all it says is to install in a location as close as possible to the branch circuit breaker to minimize lead length. I've installed a number of these (from different manufactures) and the common thread is to keep the leads as short as possible. Never saw any reference to locating close as possible to the main. It looks like you can use hole #3 and keep the leads relatively short.