Crank Thrusting Foreward Issues

Wow I've been doing nothing this for a while now and haven't heard that one. Hey I love learning new things, thanks! I don't care what they say about you, yellow rose, you're alright in my book. I cannot confirm that that's what happened but it makes sense. I remember the first time I installed the 904 it was a complete pain, the second time not so much. So to fix this I need to remove, inspect, and retorque #3 cap?? Or is my bearing and cap now trashed??

Bearing and quite possibly the crank where the bearing rides, as it normally wouldn't hurt the block unless the bearing spun.
If you put the converter in and were able to turn it easily by hand to put the first bolt in it's probably fine, because they either miss the pump ears and are bound up or not.
There really isn't an in between unless you had to force the converter to turn to line up that first bolt.
Not to mention a bind like that would have taken the trans pump WAY before it wore your thrust bearing.

Converters can balloon under load though, and that's hard to find out except for the end result(which is a trashed thrust bearing and bearing surface on the crank and even a trashed trans pump from the converter pushing the center gear of the pump back)
You did say you run boost right? :D
Again, if you were able to pull the converter forward 1/2 inch or so to the flex plate to put bolts in then converter ballooning is probably not the problem.

THE most likely thing that happened is you missed checking the clearance on the thrust bearing to crankshaft so you didn't notice the crank being worn there.
See the thing with a thrust bearing is that you could literally cut both ends of the engine off and only have 6 inches of the center left and still only have that same amount of forward and back movement at what was left the crank because of the thrust bearing.

I doubt it has anything to do with your front balancer install not being tight either as some mentioned, and the easy way to find that out is to check the flex plate end and see if it also moves forward and back that much there when you move it.
If it moves the same (and I suspect it does) then you have excessive thrust bearing clearance and need to determin if you just missed it or something caused it after.