Specialblend thanks for info that's good to know. Camatv solved the mystery for me, the spacer is in fact the spacer that goes on the shift shaft. I feel like a dip shit for not seeing that on my own. I was told it went behind the shift fork.. I got a "good deal" on this tranny but apparently the seller did not know that much about it. Hope it turns out good for me but I am prepared for it to fail. The seller guaranteed money back that it works well. Guess he didn't remember how it went back together..... I will report back after it is installed.
Souththirty, the welds on the drum are silver color and don't appear to have been overly hot like the weld on the shift star.