someone please help me understand this.

I'm learning right along with you Bill.

As I understand the video, the trans output and the rear pinion need to be straight. But then spring wrap comes into play and the rear pinion should be down a degree or two to allow upward travel.

So, yes, it appears both being down is wrong. If you set the trans at 1* up, that will allow for spring wrap of 2* to end up with 1* down. The offsetting angles of trans at 1* up and rear at 1* down (after spring wrap) should work.

Now, I'm not sure moving the trans is the best way to accomplish this. What do you think @67Dart273? Would it hurt to do it that way?