It probably started life toward the wide side of the end play spec, and wear on the thrust washers has allowed it to open up a bit since. Factory assembled were never very close to the small end of the spec.

you're really not going to be able to tell without tearing it down...could be a little thrust washer wear at every one....or it could be all at one and a mating hard part at that point is scored or trashed now too.
Without x-ray eyes, nobody can tell.

 

ericnova72 thank you so much for input and its much appreciated and I can't thank you enough. I will start to take it apart soon as I get the fluid drained out and I am making a make shift setup so I can have it sitting vertical so I can take the stuff out and start checking up things and I am hoping stuff is good as I already bought over a few hundred dollars worth of special tools to press in the different drum sections and take the snap rings and replace the clutches and steels and put all new bushings in and other stuff. I also got some extra critical parts to use just in case something does not look good.

Hopefully its a good buy and after a rebuild it will be good for a long time when I would need it. Current one in truck is fine but they are so hard to come by in my area that I got a spare and I always wanted to know how to rebuild one and know how they work etc.

 

As mentioned it's probably just stacked tolerances at this point and of course assuming all the hard-parts are okay, you can obtain thrust washers in different thickness if the clearance comes a bit loose. I have in the past just gone by a transmission shop with calipers in hand and normally been able to find what I needed but you can order them online too.

 

Thanks chasracer for the information and much appreciated and I will get some if my kit does not. My kit comes with a lot of extra stuff most other kits don't as it even has a full set of bushings which most kits don't have. I will buy some different thrust washer sizes so I can get the proper range I need to get it good and hoping all the gear parts inside are still in serviceable condition like the planetary gears and some of the other parts that can wear out with a lot of mileage. I wish they made all new internals one could buy.

Getting a th350 in my area at a junk yard is not available and I live in a small town of less then 20,000 people and all area junk yards and even with in a 50 mile range there is nowhere to get anything like the such. I was lucky to find a guy on facebook market place that had one near me but I had to drive 70 miles to get it picked up and there not always easy to get in my part of Ohio. If it turns out not to be bad then I will keep all what is good then maybe buy the pieces off of ebay one at a time till I can get one to throw together without having to pay a thousand plus dollars for a rebuilt one from summit or jegs.