I have a 904 trans that is being mated up to 360, I get the torque converter fully seated in and seems to be good. When I connect it up to the motor I have to pull the converter up maybe a 1/4 to 1/2" to the motor. It seems that the torque converter is coming disconnected from the trans at this point. I have tried 2 different torque converters and 2 different flex plates. and found the same thing.
the issue that I am having is when I put the car in neutral I seem to get a leak from the snout area of the TC. the trans will go into drive but the car will not move (I think its not turning the pump because of the whats happening above. ) Anyone run into this issue, or does it sound like something else is going on?
thanks

That spacing is correct, something is definetely wrong with the trans.

That is right. You should have to pull the converter up to the plate. If you doesn't you have the converter in the transmission wrong. Sounds to me like you have another problem. Are you sure you have it full of fluid??

I had 10 quarts in it, for fluid that should be more than enough to at least move it. its got a standard pan.

10 may even be over full. and why it is spitting it out. May well be coming out of the breather.