Same thing happened to me and it was the pilot bearing..use the old smaller size and you'll be fine!

You should check over in the Project Updates section in the "427ci LS2 sleeved, dry sump" build thread. Dale had to by a spacer plate from D&D that goes in between the bellhousing and magnum transmission in order to move the transmission back about 7/8". Might apply to your situation also.

I had excatly the same with my LS7 and D&D T56. Problem was big corvette style pilot bearing.

If you have this

http://i4.photobucket.com/albums/y14...i/86eee8bb.jpg


You need to take it out and use this one wich fit 3/4" deeper.


http://www.speedengineeringlsx.com/g...aring-14061685