Thanks for the procedures! I was able to fix my drum clearance issues and got 5 disks in the forward and 6 in the direct by putting a friction disk right next to the wave. I then ended up with about 0.055" for both, so I am pretty happy.
Another question pertaining to the fluid and initial start up. The engine is freshly rebuilt and needs a break in (first time for this as well). I want to have transmission in the vehicle for break in. Can I leave the torque converter separated from the flywheel and break in the engine? In my book he is very clear that the space between flywheel and converter should be about 1/8", this seems awfully close to have that flywheel spinning at high rpm while the TC is at rest. Can I space the bellhousing to the engine to give me another 1/2" so that I feel comfortable breaking in the engine before going forward with the transmission procedure?