How far should the thow-out bearing move as you tighten the pressure plate to the flywheel? With the PP and disk sitting on the flywheel there is about a 1/4" gap where the two bolt together, is that normal? When I tighten them together the TO bearing gets pushed out a lot, the fingers on the PP are almost level to the surface of the PP. Help would be appreciated as I really need to put it back together.

Oh yeah it's an LT4 PP with stock LT1 disk and freshly surfaced flywheel.

 

What you are seeing is normal. As you tighten down the pressure plate, it pushes the fingers up (because you are compressing the disc). Make sure that there is no gap between the pressure plate bolt flanges and the flywheel, and that everything is tight. Use a star pattern when tightening and tighten it a little at a time. Also use some threadlocker on the bolts. What I usually do is tighten them with a 3/8" ratchet, then once the PP is fully seated on the FW, I torque them to spec (15 ft-lbs I think), then give them another 1/4 turn or so, per the shop manual. Basically, if you don't have a torque wrench, turn the bolts til they won't turn anymore, and then give them a little push. HTH