Hi Don,

    The fact that the transmission will shift with the engine off, suggests
that the shift linkage is adjusted right. I would look for a problem with
the hydraulics, (air) in the hydraulic system, maybe? A really long shot
would be that the clutch disk is in backwards, but unlikely because the
clutch will still release in first and second. Flat side of the disk goes
against the flywheel, springs out.
    Try this with some help, pump up the clutch, and open the bleeder as
usual. Then while the clutch pedal is all the way down, open the bleeder
valve. This is where the helper comes in, have your helper manually push the
"slave cylinder" all the way in (retracted) with the peddle down and the
bleeder still opened. Then before raising the clutch pedal, or releasing the
slave cylinder, close the bleeder valve! Then slowly raise the peddle
allowing the fluid plenty of time to fill the master cylinder. Now pump the
clutch very slowly, all the while making sure the slave cylinder has
resistance on it. Don't allow the slave cylinder plunger to extend and stay
there, make sure it goes back in with each stroke. Also sometimes pumping to
fast will not give the fluid enough time to "draw" into the cylinder,
causing a void, reducing the stroke.
    This should eliminate air as the culprit. If you still have trouble,
then the suspect would just about have to be the Master cylinder,
or.............?
    Have a good one.

MARRY CHRISTMAS

Howard