The only way you could move the crank that far would be to remove the thrust bearings. I don't recommend that.

The converter wasn't all the way in. I see another shiny mark behind the one you're referring to, indicating that the converter was still not fully engaged on the front pump and input shaft.

Get a ruler and measure the distance between the TC mounting surface on the flexplate and the engine's bellhousing mating surface. Put a straight edge across the transmission bellhousing surface and make sure the converter has the same clearance plus at least 1/8", then reinstall the engine. It may take a fair bit of wiggling and turning to get that final bit of engagement but you have to have it.

Before you put the converter back in, clean the rust off with Scotchbrite or 600 sandpaper, otherwise you'll soon be pulling it apart again to replace the front pump seal (I'd do that now just to be sure). Lube the seal surface with tranny fluid as well.