That's good info right there. Since you've done this, lay it out for me... How did you hold / chuck the crankshaft? How did you keep the drill level? How did you find center? How deep did you drill? Use a drill stop, or measure the bit, and mark with tape? What type of drill bit did you use? There's a lot of ways to F this up...
I'm telling you all this because I wiped out 2 cranks. I've convinced myself that the input shaft had to much pressure on the back of the crank. Why? I never got that far, had a new engine built, and made sure the crank was drilled correctly. 10k miles and no problems so far.
I drilled it under the car hillbilly style.
I know its a t56, but the manual conversion portion is the same. I snipped the tip of the input shaft and had no issues on 2 motors and thousands of miles now for years.
I also went hydraulic, which was not my first choice but it is a simpler deal than setting up the linkage. Either use a quality (not mcleod) hydraulic throwout bearing, or get an external slave setup (which is what I do suggest.)
Drilling the crank is a ton of work, and honestly unnecessary unless you're sending the crank to the machine shop anyway. Just make sure you get decent clearance between the back of the crank and the input shaft. I probably removed 1/4" or so from mine. MEASURE before you cut.
I cannot speak on your behalf, however if the issue was crank thrust and clearance between the back of the crank and the input shaft, measuring, and even mocking it up with clay, would alleviate any potential thrust issues.
Yes, you're block is drilled for a ball stud for the Z-bar. I also have a 403 engine, all fresh with the same recesses. I would NEVER cut the "snount" off the main input shaft. I thought about getting one of those "sneaker" pilot bearings and mocking it up to see if the 403s "triple" recess is deep enough. I'm not a fan of drilling a "clearance" hole to use the sneaker bearing either. I personally would only use the sneaker bearing if the "mockup" had clearance.
My thinking is if the sneaker bearing doesn't work out, due to the bearing recess hole not being perfectly centered or the bearings don't hold up, etc, your going to have to pull the engine and machine it properly for a factory type bronze-oiled bearing.
Rather than do my 403 that way, I'm changing directions, for now.
Last Wednesday I dropped off two 425 crankshafts and one 455 crankshaft. One 425 and the 455 are already machined but for automatics. The one 425 is std/std perfect crankshaft. Hopefully it'll work out. I told him a lite polish will be fine clearance wise if needed.
I gave him the Mondello pilot bearing drawing. Good luck.
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