Customer friend came in with his truck and stated it sounds like the engine is knocking on the lower end for a couple days.put it up on the lift and sure enough loud knocking from the torque converter not the motor. Disconnect the converter and sound us gone.can manually spin it and can hear something. Pulled trans back and converter out to find this! Pulled the front seal and got the 2 fragments out with a magnet. never seen or heard of this before. 350 700r4 combo in a 41 ford truck.
^^^^^ More about that…https://www.google.com/search?q=set...te=ive&vld=cid:9f5a805b,vid:afzBif5snOg,st:93
I usually shoot for an eighth of an inch gap. Adding washers usually helps that. The local race transmission shop Mike's Transmission advises eighth of an inch and gives you a sheet that tells you how to do it, in case you don't know.
Sounds like a story that isn't being told with all the details. But if we are throwing guess's to the missing details, Buddy did a transmission swap, didn't have it set in properly but tightened it down anyways, a bit of driving and it fixed itself into place? That last little bit is always the charm.
As well, there was an old thread about the finger on the pump gears can be of different lengths complicating matters even further.
I think on some auto transmissions the lugs on the pump drive gear are flush only to one side of the gear. If the gear could could be installed the wrong way in the pump it could bind the converter from seating fully, or only allow partial engagement between the pump gear and the converter hub.