jthuma94, I just finished installing my T-5, and like most of the bolters it needed some tweaking to get it going. I had a strange noise also, caused by the clutch disc hitting the fly wheel bolts. I turned the clutch disc over next time, yes this time I put it in backwards. Now I still had a noise "gear grinding" caused by the PP not releasing the clutch disc, so I put 1/16" washers under PP and noise is gone, but clutch slips real bad, caused by the T/O bearing riding on the the PP/diaphram so I did the washers 1/8" between tranny and bell housing trick, problem fixed. I've check some old clutch/pp set up and determined that if the clutch disc is more than 5/16 thick it will drag and the T-5 will not shift into 1st, 2nd 5th & rev, but will slip into 3rd & 4th! So getting to your problem, I would make sure of three things, clutch disc not hitting flywheel bolts, then with clutch in, the clutch disc spins freely!, and I mean no drag, and with the clutch out the T/O bearing isn't riding against the tranny bearing retainer/housing. All of this can be seen with the inspection cover off. I hope this helps and I can tell you how much this improves the highway driving. I surprised a few vehicles on the freeway this weekend, when that old truck was keeping up with them, 65mph @ 2000rpm.
Phil