Tom,
Had the same situation on my ls7/tko 600 with regards to the release point. Just barely disengaging when depressed to the floor and releasing immediatly off the floor. My numbers came up with a difference of .210 to .215 this puts you on the high side leaving to much gap between the bearing and fingers of the clutch. Another words your not depressing the pressure plate deep enough. You need to close up the gap, problem is another .100 conical shim wil close it off to much. What I did, to put me in the center of the range was machine off .050 from one of the shims and tig tack(around the perimeter) the shim on to one of the .1 shims to give me a shim that yielded
.150". This moved my difference number to .160 and now it grabs in the center of the clutch pedal travel.
I dont think that your adjusment parameters are what caused your bearing failure, the first thing that comes to mind is weather or not your slamming the back of the master. I would expect the leak to be up top if that was the case. The pedal stop is very important, you should hold the pedal firmly to the floor and adjust the clevis until the master bottoms out. Then back off two full turns.
maybe its a line failure where the lines enter the release bearing, when you get the trans out please let us know what you found, Jim over at hurst drive line will support you as well, he's very good.
Rich
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