1/4 inch sounds like the input shaft is not going into the pilot bushing. try installing the bell housing first then the trans. if that doesnt work you need to measure the depth from the inside of the pilot bushing to the trans.
you can use a pencil or something small to get the measurment to the face of the flywheel. with out the clutch put the bellhousing against the motor with a few bolts and measure from the flywheel to the mating surface of the bellhousing where the trans bolts. add the 2 together. then measure the distance from the trans surface to the end of the input shaft. this should tell you if there is a problem of the trans shaft being too long.
hope this helps
At one point I did this, what I did was take the plastic lay shaft, and placed a mark, where it went completely in. Next I took the bell housing off the transmission and inserted the transmission into the clutch and pilot bearing and made the same mark. Then the two marks where measured. I agree the lay shaft could be the problem, I was also wondering if the pilot bushing could be the problem?
