Just wanted to thank all you guys who helped and contributed to this thread.Happy to say I dropped the engine back in today and while I didn't finish the install the TC was perfect. I can say without a doubt that I had the thing seated twice when I thought that it wasn't. As a few said the easiest way to know it's seated is when you drop the motor back in, you should have about an 1/8" gap between the flywheel. This is exactly how things looked. Looking back it actually wasn't too difficult to seat but the anxiety of having never done it and not knowing if it was correct was my problem!
I regret to report that due to not being able to obtain the input shaft o-ring I wasn't able to change it. Hopefully this won't lead to the shift engagement delay mentioned. I really wanted to change it but I can have this thing down anymore the OD just went out on our Pathfinder, looks like my next work is already cut out for.
It amazes me to read how quick some members can tear these cars down and throw back together as it has taken me quite a bit of time. I have however forgot how some things go back together since it's been awhile since taking it apart. The Haynes manual I have doesn't cover it all that great in detail. I've been reading the FSM too but the manual even though it says it for an 03 there's a good bit different, maybe because it's for the foreign models .
Hopefully tomorrow I'll be able to finish getting things together and she'll run without having anymore issues.
Edited by subaruUser, 11 January 2014 - 12:54 AM.