Thanks for the input from Stan & Mark.
I never dropped the tranny, I only loosened the front mount center bolt then lowered the engine and trans and pulled the engine out the rear.  I did disconnect the shift rod and hung it up with the stud removed from the trans. 
Yes, it was the pilot shaft needle bearing that chewed up the pilot shaft that comes out of the transmission, that the friction disc is splined on.  
Stan, the front tranny mount rubber, is it eccentric?
Mark, the shifter stud that mounts to the trans, does not seem to be perfectly straight.  I noticed, when tightening it down, that I was turning the shaft with a 13mm wrench, that there was a little movement of the shiftrod, not more than a couple of mm.  

Don Bolt