Thanks you guys, after I posted , I thought, THE BLEEDER SCREW! MAKES SENSE.
No, I did not put sealant on it (did not even occur to me !!) and I bet thats exactly where its bringing the air in when I'm pulling vac through it.
xlr8or, I thought the same. When I set up the trans on the Bell Housing and engine , I did confirm I had enough clearance to the BOTTOM of the crank pilot hole, (even with my OEM motor plate ( I think its 0.070 thick)) but its a tapered hole (behind the pilot bearing) and I am beginning to wonder if I measured in the wrong spot and the input shaft nose is riding on the crank pilot hole radius area since I know its not bottomed out.
The other possiblity is my concentric measurements were wrong , but the roller type pilot bearing I am using should be toasted by now if the input to crank concentricity is off, and I would have expected trouble assembling the trans to engine if concentricity is off, I measured total 0.010" off center concentricity which is at the upper limit but should be OK right ????. One way to check/diagnose input shaft to crank pilot clearance I guess is to loosen the bell housing bolts a tad and place "U" shaped shims between the bell and engine block at each bolt location to see if this solves the issue before I pull the drive train out to measure again. Of course than starter must be shimmed same amount and HTOB must travel a little further also. Input shaft dragging on the crank is the only logical thing left after I confirm I can get a little more than 0.400" HTOB piston movement.
Thanks for your input