Messing around with this dana I got. I've got it all stripped down and am installing the pinion with the old shim packs for a starting point. There was no scribe mark on the new pinion. So I install it, with a new 1350 yoke, and it won't turn. Removed both shim packs for shits and grins, and same result. Put the old pinion with original bearing back in, same results.


Am I doing something wrong?

Did you reuse the front shim pack that goes behind the front bearing? If so then it needs thicker front shim pack, if not put the old one back in and go from there. The Mopar FSM calls for 15 to 20 inch lbs. rotational torque on used bearings with no front seal with the pinion gear pointed straight up towards the sky, 20 to 25 lbs. with no seal on new bearings and races I shoot for the tighter set ups, not the looser specs.
IHTHs

Yes, both the shim packs behind the bearing cup, and the outer "preload" shims were resued.

Unfortunately the rebuild kit came with a crush sleeve and no shims.

Crush sleeve? For a Dana? If it don't turn, you got to many shims under the big bearing cup or not enough under the front bearing. Normally if the two pinions have the same diminsions (say 3.125) use the same spacer shims under the cup, preload can be different amount of shims. If you don't have the set up tools, it's a hit or miss situation.

I bent my baffle behind the inner bearing cup knocking it out and had to get a new one. It was thicker, so I had to adjust my shim packs to compensate for it.

Any chance one of the outer shims got stuck to the bearing or fall off during disassembly and you didn't realize it?
Same brand of bearings?

When I was shopping for a rebuild kit i noticed there were ones for front 60s that only came with a crush sleeve and no outer shims. Had to really compare some of em to know that I was getting what I needed.
I ended up ordering a JEGS brand one. Came complete with two different pinion seals, plenty of shims, ring gear bolts, and Timken bearings.

Under no circumstances use that crush sleeve to set the pinion bearing preload, do not use it

Got it figured out. Not enough shims on the rear bearing. Got it all setup and stuff.