I made a temporary mask consisting of 2 L-shaped parts that forms a square opening and that fits just above the first folds of the bellows. This pretty much got rid all of the stray lights. I just need to find the right flocking material that will fit in that space and I need to cut it square to very precise dimensions because its tricky to fit the mask in between the folds.

I feel much better now that I could identify the source of the problem, thanks to everyone's input.