Ok, I just lightly tightened the bolts on the diff cover and it closed up nicely without binding anywhere. I tried it with out the o-ring and the gap was still there but it closes up with very little pressure. And the trans spins freely in neutral.

I know all the bearings are in place correctly because I printed the pics and info from this thread and had them sitting right next to me

Also, what should I torque the housing bolts to and should I use some threadlocker on them?

I have a complete list of torque specs on my 4T65E info page, here is the link.... 4T65E Transmission Info

The correct torque spec for those bolts is 26 ft lbs, no threadlocker.

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4T65E Transmission Info
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