T35 (new rebuild but with problems)

Time to drop the pan and make sure everything is connected right. I'd check the band adjustments while in there, and probably go ahead and drop the valve body and clean it real good since fluid is drained and trans is open. The tubes are real important since they send fluid where it needs to be. The only other thing I can think of are the servo seals. 

There are some rings that act as seals in the center support between the front and rear drums. They are much like piston rings. Can be hard to get into place without cracking when rebuilding the trans. I cracked one of the three (IIRC there is a stack of three) when I rebuilt one, but that didn't cause any issues. I don't know exactly what they seal off, so may not cause any pressure issues.

Debris in the screen could be from break-in of new clutches and such. I'd remove, disassemble, and thoroughly clean the valve body. A sticky valve or clogged passage is more likely the problem than anything else, assuming the clutches and bands have been replaced and adjusted. The o-rings in the servos can also be an issue in older trannys. relatively easy to replace the servo o-rings and clean VB once the pan is off. May as well check band adjustment with everything out of the way also. One band adjusts from outside the trans, the other with pan off. The outside one is the hardest to adjust because it's hard to reach and adjusts to a specific torque... AMC used a special tool, though you can do it with a regular torque wrench with trans on the bench out of the car.

Make sure you blow high pressure air through all the VB passages. You really need an air compressor, not a spray can of cleaner or canned air. Wear a face shield or at least good goggles, as some of the passages are blind and stuff comes back out at you! Burns eyes, doesn't taste good either...

Hmmm... I'm no trans expert, but it seems to me that the converter connects the engine to the trans, but the "snout" of the converter is connected to the converter body, which turns with the flexplate (crankshaft). This snout turns the front pump, as you have to have fluid pumping into the converter for it to work. Since the pump turns with the engine you should have control pressure, but an internally bad converter may not turn the trans.

Short answer: yes, you can have a bad converter and still have control pressure.

Well a bit of the pig in a poke project car's history came to light yesterday. A previous custodian of the car revealed that the car had transmission troubles when the club members were working on it in the past and that it had three separate transmissions in it with no cure, same symptoms so they suspected the torque converter. I think it is good that we did the testing and adjustments we did,but now we are planning to remove the converter and have it rebuilt. Northwest Transmission parts said they could rebuild the converter which is a service that I did not know they offered.

Thanks for your input.  The car will barely move even with a significant amount of throttle.  We intend to pull the engine and remove the torque converter from the front of the tranny next week.  On a 62 Classic, engine removal is pretty easy once the grille, readiator and front radiator supports are out of the way.  Joe