I have recently installed a rebuilt engine and transmission, the engine is a 5.0L V8 (302), the transmission is an AOD (automatic overdrive). They came out of a 1979 ford thunderbird. The engine and transmission both operate at peak performance. But I am having a problem and I'm somewhat confused by my situation. When I put the engine and transmission together, I lined up the marks, and made sure my pump was ingaged. I put them together outside of the car, then I lowered them down into it. After I completed all of my work, I tried firing up the engine, and a horrid grinding sound came from the torque converter. After that, the engine was real hard to turn over, even by hand, it can be turned, but it feels very tight. My torque Converter seems to be grinding upon my tin seperater, the tin spacer that acts as a gasket between the rear of the engine, and the transmission. Mostly these are only found on fords, from over the years experience, I have very rarely noticed them on any other vehicle. My question is, why would this be occurring? Do you think it is possible that my torque converter jumped out of the pump just a hair? I would like to hear someone else's opinion first before I tear back into the transmission. Thanks.

After you attatched the engine and transmission outside the car, how did it turn over?
Can I assume you put a turn or two on it from the crank dampener before install... yes/no?
Are you certain that the converter to flywheel/ringgear bolts are the correct application and torqued properly?
And how about the bolts that retain the flywheel/ringgear to the back of the crank? Loc-tited and torqued?
The starter is next to check. Shimmed if necessary? It's not meshed with the ringgear?
Let us know...