Grigg - It's a 331. It must be the picture angles, because in person at most I'd want to drop it would be 1"-2". Here's a picture of where it sits right now:
http://laanderud.com/65chevy/042207/image_7.html The only people that say it sits too high are the people who area looking at the pictures online, everyone who sees it in person says it looks like it's where it needs to be. If you're looking at the pictures with fenders, the engine is sitting on 3" worth of wood, it's actually now sitting about 2"-2.5" lower.
The transmission is on the engine and it's basically a straight shot to the opening for the carrier bearing.
SW Radical - Thanks, that looks like it might work too. I'd be interested in seeing your pictures if it's not too much of a problem.
Lee
