Houston, we have a problem. I measured like you said and found the torque converter needed to seat into the trans housing atleast 0.200" more plus the 1/8" gap. i took the torque conv out and looked into the shaft/seal area on the trans. what i found is not good. can you see the broken pieces in there ? i guess somehow i tore that up installing the engine looks like it is probably the bushing - oil pump body. see #2 in photo below. i wonder if i can replace that by just taking out the seal and clean that bushing out, or do i need to pull the pump body with the slide hammers.