Thought I would reply with an update on what the solution and cause to this problem seems to be. Thanks to all that provided feedback.
1st The Solution- for me at this time is to remove the tall rubber bumper under the dash that is the pedal stop. This provides more throw and the clutch seems to grab at the right distance from the floor and disengages properly. Tranny goes into gear too. I am replacing the bumper with a thin one to prevent the metal-to-metal contact. I know the pedals will be at different height… but I should get used to it for now.
2nd Cause- I think the cause is that someone welded some flat steel plate over the floor pan in the driver side. Rust of course! Since they just welded the plate over the old pans it made the floor pan not deep enough for full pedal throw. They welded at the curves of the pan .. so the plate is not flat against the bottom/back. So an inch or more could have been lost easily. I added jute for insulation when I replaced the carpet too. I saw the plate when doing the carpet… but did not realize such an effect. It is not obvious when sitting in the car and the carpet fit ok too. So I did not expect any issues and was deleted in my memory bank.
Man I got GOOD at removing that tranny… 1:15 min tops! On a positive note I know more about clutches now! Hope to get to drive the car for the 1st time this weekend….. we will see what other bugs appear.
Clyde