I have figured out the problem! No I did not remove or touch the drive plate (flexplate). When the torque converter is fully and properly seated on the input shaft it will sit lower than the edge of the bell housing by about 1/3-1/2 inch. I was finally able to figure this out by messing around with the old transmission and torque converter, after about 10 minutes I finally clicked them together so that it sat about 1/2 inch below the rim of the bell housing. Unfortunately I may have slightly ruined my new transmission and/or torque converter by tightening down the tranny mounting bolts while the TC was not fully seated. I could not for the life of me get the new torque converter to install onto the new or old transmission so I think I may have only slightly messed up the new torque converter and hopefully not the input shaft on the tranny.

THE TC WILL CLICK CLUNK (DROP DOWN) ONTO THE INPUT SHAFT THREE TIMES TO BE FULLY SEATED.

If you look at the input shaft there are three distinct levels of splines that must match the TC. I was having issues with the last set of splines which is located at the base of the input shaft and these splines are only about a 1/3 inch deep. These are the splines I did not have lined up and that third of an inch is all I needed in order for me to be capable of turning the crankshaft to line up the TC to flexplate bolts (the 8 small bolts). I am going to finish the tranny install tonight so wish me luck on three things.

1. The junkyard tranny is internally in proper working condition.
2. I did not damage the input shaft of the junkyard tranny by tightening down with the TC not fully seated.
3. The torque converter I am using is from my old tranny (the one that may have had water damage) and I hope that TC is not faulty.

Thanks for the info guys, I just hope someone in my same situation can learn from my mistakes.

 

I did not see any guidance for installation of TC onto transmission drive shaft. I might have missed, but looked.

These types of lessons can be frustrating. I hope everything works point forward.

good luck

 

I did search through the manual for TC installation notes and did not see any either. Of course it may be in the Automatic transaxle teardown part but I did not feel like going through hundreds of pages with a fine tooth comb.