Age 60. Took $138,000 401k early w/d, but contributed $7128.48 to 401k same year. Shouldn't I owe 20% on the difference ?

Box 1 of your W-2 does not include your elective deferrals to the 401(k).  you employer has reduced the amount in box 1 by the amount reported with code D in box 12 of the W-2.

Your $7,128.48 of elective deferrals are entirely independent of your $138,000 distribution.

If the distribution was made after you reached age 59½, it is not an early-distribution.

The amount withheld for taxes from the 401(k) distribution was the mandatory 20% required for any distribution from a 401(k) that is eligible for rollover.  It has nothing to do with the amount by which the distribution increases your tax liability.  The tax withholding is simply a down-payment toward the total tax liability calculated on your tax return and is credited on line 25b of Form 1040.