Hi, am new to the forums here. My son and I have been working on his 85 Mustang 5.0 Convertible. We put in a Blueprint 306 and have run into some issues with the transmission. I am hoping someone will be able to give some guidance before taking it to a transmission shop to just be told it needs to be replaced/rebuilt. My son is hoping to get a year or so out of the original while saving money for a rebuild. The situation currently is as follows:

Engine and transmission are in and the vehicle drives. My son has done some of the work, I have done some of the work. Not always at the same time and he made a mistake. He did not take the Bellhousing spacer off the old motor prior to selling it. When he put the transmission up to the motor, it did not have one on it, he ended up just putting on the inspection plate and shrugging his shoulders as far as being able to see the flywheel. He got his car running and such like this. We took it out for a drive and the transmission does not shift past 2nd gear. I crawled under the car to take a look at his work and discovered i could see the flywheel and then discovered he did not install the spacer. The car is at the shop to have some other work done and will have the transmission pulled while its there and put the new spacer on (obtained from Speedway Motors as i am lucky enough to live in same city as their main distribution hub).

My question is, without this spacer, it seems like there would be extra space in relation to the torque converter causing it to not engage the pump properly, not getting enough pressure in the transmission and causing the shifting issue. This is just me 'hoping' this shifting issue is related to the missing spacer. Am i on the right track here? The transmission worked fine when we pulled the old 5.0 motor out so I don't see why it would not be working now.