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FWIW.. I think I might have found the problem. I finally got the chance to take a close look at everything and once I got to the seperator plate I noticed severe wear on the #8 check ball hole (2nd/1-2). I didnt notice how wallowed out it was before so this time I put a check ball in the hole and it would almost fall through but if you put a little pressure on the check ball it would get stuck. I dunno how I missed that on the first assembly (complacency maybe?) but lesson learned to check those buggers closely every build.
Other than the seperator plate hole being worn severely (and the previously mentioned band) the rest of the trans looks new so I replaced the seperator plate, replaced the band, reassembled the unit, and it patiently awaits installation for road testing.
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