Inspection of a 904 torqueflite

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This is the 904 with the reverse drum on the shaft. See how shallow this is......-

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Now look at this....I can slide it back this far. This is what it is like in the transmission wen the stack is installed.
The 999 1/4” play is this....or identical to it. I think it’s normal. -

So.....if all this was normal......and let’s say the output shaft sealing rings were still sealing...l.which I think they were.
No clearance issues.

What would cause the reverse drum to wear like that......
Hard to tell what you are looking at. I can't see anything wrong.
Maybe you need to take a closeup pic.