Things are going back together! Lots of high temp grease was used. I finished bolting together the engine and transmission, and noticed this gap on the side away from the starter. See the gappish area between where the engine and transmission mate.
You can't poke anything through, but it seems kind of off.
http://forums.pelicanparts.com/uploa...1558134353.jpg
http://forums.pelicanparts.com/uploa...1558134353.jpg
http://forums.pelicanparts.com/uploa...1558134353.jpg

Here is the other side, below the starter. No gap.
http://forums.pelicanparts.com/uploa...1558134353.jpg

Is this normal? Or have I screwed something up? I can turn the engine over by hand while in gear, and the hubs rotate properly.
FYI the fork is properly engaged. That part I do know!

Somethings wrong, absolutely don't run it that way.

If it were mine I would take all it apart to check and see what is preventing the transmission from seating evenly with the engine. Looking at the flywheel and clutch I would take the flywheel to a machine shop and have it surfaced, replace the rear main seal and put in a new clutch disk and pressure plate. If you haven't already measure the clutch disc to see how worn it is. pecs are in the Bentley repair manual. Just my opinion. Recently did just that to my 78 SC and it shifts better and engages smoothly when taking off from a stop. You have it out and apart... The hard work has been done!

Flywheel was checked. RM Seal is fine. It has a brand new clutch disk, new pressure plate, new throwout bearing.
Everything is new or clean, so I'm trying to figure out why it didn't mate like I expected.

I'll pull it apart again in the morning and look for the culprit.

Pull it apart.....something is not right.
Pilot bearing not in all the way?

Tired me left the washers between the engine and transmission. I took them apart, removed the washers, and now it is back together properly.

And back in the car too! Had a great friend drop by and we got her into the car in under 2 hours. The best thing about Porsches is the people.

Everything is hooked up. I went to do the clutch adjustment last, and discovered I'd put the helper arm with its helper spring on the wrong side of the tab that stops the arm travel. So...

I had to remove the screws that hold the tab in place, because I can't get the arm off at this point. Got one screw out with pliers, had to drill off the head of the other.
Tomorrow I'm off to the store to get new screws and a tool to remove the headless screw. Then clutch adjust, and should be back on the road. Oh, and put oil in it.

Adjusted the clutch with my wife's assistance. Put in the oil. Found a connector I'd missed. Started up fine, runs well, shifting seems good. No leaks. Just need to get her off the jacks and clean up the garage, hopefully sometime tomorrow.

Was ready to drop it off the jacks, and realized I'd forgotten the rear sway bar. After taking care of that, I warmed it up and topped off the oil. Drove it around the block a few times, and the clutch is much easier to press. It shifts more smoothly than before, and has no odd noises. I drove it to work today.
I think everything is done, now I just need to catch up on household chores and clean the garage! Thanks everyone for your input and guidance.

These work great, been around for a while now.