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Originally Posted by 91240
1. the torque convert is not completely set on the transmission input shaft splines putting a lot of pressure on the motors rotating assembly
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That's what happened.
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Originally Posted by 91240
2. maybe we got a bogus tranny that's not allowing the motor to rotate (but it rotated fine when i loosened the tranny)
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That is not likely, but not impossible. Pull the trans out and see if you can rotate the torque converter. To fix #1 above you need to remove the trans anyway.
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Originally Posted by 91240
Has anyone come across a situation like this?
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This actually happens quite often.
Once the trans is out remove the torque converter. See if the end that goes into the trans shows any damage, or if the shaft that goes into the torque converter shows any damage. If so, rebuild this trans or replace it. Running the engine with the torque converter bound up can destroy a lot of parts.
If everything looks good, stand the trans on end so that the bellhousing is up. Install the torque converter and rotate. You'll feel it drop down each time a spline engages. There are three splines that need to engage. Keep rotating until you feel all three engagements. If the torque converter is fully seated the front of the converter will be below the front face of the bellhousing. The be careful so that the converter doesn't slip back out while you are installing the trans!