To eliminate the obvious, yes I pulled the pilot bearing out. The flywheel is facing the right way. I have that 1/16" or so thick plate installed. The torque converter is lined up right with the flywheel, the drain plugs and converter nuts are fitting in the right places on the flywheel.
I pulled it apart and checked it all. The converter is about 5/8" inside the bell. Should it be more? The edge of the threaded torque converter studs almost lines up with the outside edge of the bellhousing. Plus the more I tighten it down, the less freely the engine and trans spins.
It seems like maybe the torque converter is not fully seated. Or that small tranmission driveshaft is not in the right way. One end of that small shaft has splines about 1/2" longer than the other end. So I tried to measure the splines, the torque converter splines are pretty deep in there, so not exactly accurate but did my best and used the end of the shaft where the splines was just about the same length of that inside the converter. Not sure how well that comes across. But anyways, still can't get it right.

Anyone know of a good C6 site? I need to get this resolved ASAP. I have this sitting at the local community college and they are starting to get a little crabby with me keeping it parked there in-op.
I may have to break down and buy a running 302/C4. Or sell it as a non-running project, which would be bad in several ways.