so ok I can't get the tranny to seat proper (tight) to the engine without using the bolts to tighten it on. Is this normal? If not I think my problem is that I have grease inside where the pilot bearing is and it is being pressured by the spline and resisting the spline going all the way in. Does this sound logical and possible?

 

You should NOT use the bolts to close the gap between the block and tranny. Chances are you have damaged the pilot bearing or the pilot bearing seal and that is not allowing the input shaft to seat all the way. When I installed the transmission on my motor I damaged the pilot bearing seal (bent it slightly) and that was all that was holding me up from sliding the tranny right in. It was like a $3.00 part from Mazda...So also check to make sure the pilot bearing is seated all the way and that you have not damaged or bent the seal at all. Hope that helps.