Update - Just so anyone else experiencing this issue is aware. Camoit was correct! The TC had disengaged and using the bolts to crank the tranny and engine together did in fact break something loose. I pulled the tranny and replaced with one from the local Salvage Yard and found that the old TC would not come off. You can feel that something came loose inside the TC and now it is stuck. Luckily the new tranny came with the TC.

Almost had the same thing happen when putting the new tranny in, so just so everyone is aware; if you use the bolts to bring the engine and Transmission together, make sure that when you turn the bolts in 1-2 full turns, double-check that the crankshaft will still spin freely. My tell tale sign on both transmissions (that indicated the TC was disengaged) was, when I had the engine and transmission about 3/4-1" apart, the crankshaft would not turn by hand. When we re-engaged the TC (with the tranny removed again) and returned to the same distance the crank still moved freely by hand.

Don't make my mistake!!