Did you find any burrs on the bushing or the input shaft? Did you test fit the bushing on the shaft? You know, when I put mine together, I had it easy. My engine was on a "roller platform" I made on the garage floor. All I had to do is lift the transmission to the engine, keeping the tranny between my knees. That bugger wouldn't go on for nothing. I tried and tried. After about thirty minutes of trying, my daughter looks at the pilot bushing and says, "Daddy, are you sure that bushing will go on the shaft? It just looks so small."
Daughters are awesome and teenage daughters have a way of reminding you how dumb you are sometimes. I thought, "They wouldn't have sent me the wrong pilot bushing. Hell, it was in there kit." Well, I measured and it wasn't even close... at least yours is close. Mine was off by .250" One phone call and a new one, with replacements were on their way.
The reason I asked if you test fitted it first was the .005 difference you told me just doesn't seem to be enough clearance. It may be, but it is going to be tight. If AA says it is the right one, temporarily mount two studs in two of your bellhousing bolt holes that are in the block. YOU WOULDN'T BELIEVE HOW MUCH EASIER THIS IS TO MOUNT A TRANSMISSION TO THE ENGINE WHILE UNDER IT! (I had to remove my transmission later on... but that is another story.) I actually tried to use ARP studs in place of all of the transmission bolts but it didn't work out. So I just used two and mounted them, one on each side of the engine holes for the bellhousing. It went in like clockwork. My daughter was helping me and we just couldn't believe it. If you want, you can keep the studs in, but I removed mine and replaced them with bolts. (So if you do this for "temp", don't tighten the studs.) Oh, you could also just buy two longer bellhousing bolts and cut off the hex heads, then round off the edges. I am sure this would work the same way...just remember to keep them loose so you can remove them after you put in a couple of bellhousing bolts.