Yes I skipped a step. Couldn't get the lower shock bolts off. There now soaking in PT blaster. The job went smoothly for the most part. Burning out the the old bushings took less than ten minutes. When I attempted to align the bushing bolts, the trailing arm bushing holes extended past the axle by at least a half an inch. Perhaps with the shocks still hooked up, the problem could be that the arms can not be compressed enough to align the holes. Is there a trick that I'm missing here?
The 240 was hit hard in the rear before I bought it in 2006 . Apparently they replaced the drivers side quarter panel and rear bumper. I also recently noticed a small dimple in the frame in the wheel well on the drivers side. I'm getting this sick feeling this might not be a simple fix.

I feel your pain. Those lower shock bolts have received a lot of bandwidth here on the Brickboard.

The bottom bolt goes through a rolled metal sleeve that is encased in the rubber bushing at the bottom the shock. The bolt rusts solid to the sleeve. I have had to resort to burning away the bushing and then using a cold chisel along the seam in the sleeve to break it loose from the bolt in order to remove the bolt.

Have you considered replacing the rear shocks at this point? New shocks along with new trailing arm bushings might be a very nice improvement to the car.

Good luck,
Randy

Two years ago I altered a set of Monroe air shocks destined for my 940 to fit the 240. Please someone shoot me for not using anti-seize... Both cars now have new springs, so new shocks will be the next step once this issue is resolved. The 940 is going to be fun... Even though it's from Virginia, it still has the original shocks.

I have never done it this way but you might try raising or lowering the trailing arm to the point the two parts line up.

If you did both sides at the same time you have further complicated the issue.

Keep PB Blasting, taking off the shock may be the only solution.

Dan

Yes I did both sides at the same time. I also didn't remove the sway bar since the shocks were an issue. I'm also wondering if disconnecting the the torque arm bushings would help.

That may help but you add a whole other dimension to getting everything lined up again.

Dan

As Dan said, it may complicate things further. I think a jack under the axle, and maybe a wire come-along may help get things back to where they need to be. A pox on all people who don't anti-seize up all the bolts down there. It can make life very difficult for the hapless people that follow.

The wire com along is an excellent idea! Could this be a bent frame issue?

I find the ratcheting tie down straps to be quite useful in pulling things into place.
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1980 245 Canadian B21A with SU carb, M46 trans, 3:31 dif, in Brampton, Ont.

I plan on using a com along next weekend. The question I still have is whether this misalignment is a normal part of a torqued suspension or did that hit in the backend cause the misalignment.

If what is happening is what I think is happening, a floor jack used under the front of the diff will usually bring the holes into closer alignment.