Multiple problems 98 Chevy Silverado

I have a 98 Silverado. We have rebuild the 5.7 vortec (http://en.wikipedia.org/wiki/GM_Vortec_engine) motor and the 4L60E (http://en.wikipedia.org/wiki/Turbo-Hydramatic) transmission. Everything is stock in the motor except we went with flat top pistons and we had it bored out 30 over and has a new fuel injector spider. Transmission was upgraded with 3-4 clutch pack. Has rebuilt torque converter and new park/neutral switch.

TRANSMISSION: From the day we put the transmission in we have had problems. SES light came on instantly. Going into default gear but not all the time. Turn truck off and it is fine. Throwing the PO785 code. We have checked the ignition switch (http://en.wikipedia.org/wiki/Ignition_switch) and have changed both the 1-2 solenoids and one of the 3-2 downshift solenoids. Waiting for the other to come in.

DASH LIGHTS: When I turn my headlights on my dash lights blow a fuse. Radio works fine as do my turn signals. Have replaced fuses and the headlight switch. Still doing it.

MOTOR: The motor has a loopy idle mostly while truck is in gear. Truck also surges under a load like climbing hills, etc. At start up sometimes dies or the RPMs drop then pick right back up. Also gets horrible gas mileage, like 12 miles to gallon compared to 18 before we rebuilt the motor.

Any answers to any or all of our problems would be great. Have spent a great deal of money on this truck to get it right and getting very frustrated that things are not working out.

First of all anything could be wrong with the the trans., who did the rebuild, done correctly? Look for an improperly seated main plug on the trans. A full trans scan can command those solenoids and check if all the connections are in place. Second, look for a pinched harness somewhere in the headlite/tailite circuit, maybe something done when the drivetrain was in and out? The engine performance, again many things can cause this, a full scan will look at sensor inputs, fuel trim and any other controls that affect mileage and performance. Can we assume none of these issues were there prior to all the work being done?

Your rebuilt motor may need the CKP (Crank Position Sensor) Variation Relearn procedure. This will require a high end scan tool in the hands of a capable tech. This tool is also needed to set the base timing (Cam Offset or Cam Retard).