Oh, the frustration of marrying a motor and transmission. Sometimes it slips right in, other times it's a two day project.

Make sure your motor is tilted at the correct angle, it should be almost touching the firewall. If it's tilted too far forward, you'll never get the trans lined up. The problem could very easily be in the vertical plane, not the horizontal one.

Check your alignment again. That tool is worth it's weight in gold. If you have a chance to get a real tool from an old tranny shaft, then do it, but the plastic tools you can get at most parts houses will do fine.

Good luck. I've been down that road several times.

Eddie