Okay, a weird one today...
So now that the trans is apart I wanted to mock up the overdrive now that I can see everything. So I put the overdrive bowl/planetary assembly onto the the trans main shaft. And noticed there is a gap between the main bearing and the bowl gear with the overdrive nut tightened all the way. The gap measures about 0.140". Do you have any idea what would be causing this? Maybe it's normal, but I feel like it should go tight against the bearing? This explains why when I added shims on the overdrive, it wasn't gaining anything on the stick-out distance, I was just filling this gap.
Is there anything that could be done to fix this, but if the overdrive would go tight to the bearing, it would just hurt the stick-out distance even more. Maybe I should just add that much more distance of shims, and maybe it will work?