Crank Thrusting Foreward Issues

You can see about a .100" gap or more between the crank and the thrust bearing in the main web..... it would be one heckuv an oversize!
You are wrong on this. I've seen it done over and over and over. That thrust was killed because the OP didn't have the converter in the pump all the way. In fact, he needs to check the pump as well, as he may have killed it too. Usually the thrust goes first, before the pump.

This is an assembly issue. That's all.

As much experience with engines and dyno's that you apparently have is probably about equal to what I have in transmissions. :D
Where's all the metal from wearing that thrust and bearing like that?
How could that much of a new #3 bearing thrust surface still be there with that much wear on the crank.
How could the pump not be engaged for so long as to wear the crank like that and have the trans still drive? (Impossible)

He put it together right and the trans is fine. (as long as there wasn't and old pilot bearing the crank register from a past stick shift)
It just got the surface overlooked on assy.

That's my warrantee decision and I'm sticking to it.:D

OH, and you can get a brand new crank from Autozone for right at 200.
Less for a reground used.