I ended up having to have a small spacer machined (Thanks Bruce) that pushed the pilot bearing out so it had full engagement with the spud shaft, and well ad spacing the spud shaft out from the tranny permanently so it wouldn't float back and forth too much.
In the earlier designs that used a pilot bushing instead of a bearing apparently the spud shaft would get forced forward during running and chew up the bushing. That was another problem they had.
It was more of an issue with my setup since I have the 5.3 block (vortec) which had a slightly different spacing of the crank vs. the back of the block and the marks adapter was actually designed for the older 350 blocks. If you do use the Marks kit, i'd measure everything before calling it a day to make sure the sound shaft and pilot have the right fit, also measure and set the throwout fork/bearing sleeve correctly. Lots of folks struggle with that.