'87 Clutch Change

Just replaced the Clutch/Plate/Bearing in a '87 MK1 N/A. Bought the set from A/Z (I know, but they had it and my son needed the car). All went well until went to start car after swap. Engine wouldn't turn over. Long story short is, if I loosen the bolts from the T-Axle to the block <1/8", (three out of the four bolts) the engine frees and will start. When it does, I'm getting some aluminum shavings from the Flywheel inspection port along with a knocking on the bell housing. My questions are:
Is there any other thing that can cause this aside from the Pressure Plate being the wrong size (too tall)? What would happen if I shimmed the transaxle off of the block for a while?