A friend of mine bought a 235 engine and trany as a unit, the thing wouldn't turn around but part way and back like you are describing. After a week of swearing among other things he discovered the previous owner had bolted the flywheel on wrong which forced an allignment pin from the flywheel/crank flange through and against the back of the block. once that was sorted out it turned out to be a good motor.
Best of luck
Jim
