Over the weekend I installed my rebuilt 727 with a new converter. Before bolting up the converter, I noticed that there was not 1/8"-3/16" gap between the TC and the flex plate. The TC is in all of the way. The builder drew a line with the TC installed for my visual check. The TC is at this line.
I did not measure the gap between the TC and the flex plate, but it is darn near close to touching. The converter would rotate and was not dragging on the TC ears, but I could not pull/push on the TC to create this gap.
I am going to buy a 1/16" shim/spacer from the builder that mounts in between the transmission housing and the engine. This will give me at least the 1/16" gap that is his minimum requirement.

Have you ever ran into this issue with the TC all the way in? If so, how did you correct it?

Thanks