The late model overdrive transmission require bell housings to be dead true to the flywheel and the crank, the input shafts can't take much out of alignment issues. I doubt your old trans will care about a few thousands here or there, but if you wish to align it, I purchased shim washers from McMaster Carr when I dialed in a Pontiac bell housing for a Tremec 5 speed. I placed them between the bell housing and the block. I also used offset alignment pins to dial in the bell housing opening so the input shaft would be centered to the crankshaft. I started out using brass shims stock then purchased hard shim washers once I knew what sizes I needed.
I had the mag base/dial indicator on the block and checked the run out of the flywheel first, just to make sure I wouldn't be chasing some odd problem around for no reason. It was flat and true to the block face.
Next the mag base was on the flywheel with dial indicator on the inside of bell housing opening while bolted to the block. By rotating the offset pins, you can move the bell housing around to center it to the crank.
With the mag base still on the flywheel, I moved the dial indicator to the face of the bell housing ( what you did ). In this position, you can align the mounting face with the flywheel, " make them parallel " .
It wasn't to hard to dial in, and sure won't hurt even if it's not needed. On the Pontiac, I had thick shims at the top, half amount mid point and none at the bottom, mine was even side to side, but off top to bottom.
The alignment pin reading showed the opening was a little to the left and down from center.
Always be sure to check both measurements after making adjustments with shims or pins.
Joe
