do I need K12900E-4 for 68 904 rebuild?

I would tear down your transmission before you order your parts.You may need other things that the kit does not have.
Have you tried Transtar?
Whatever it takes(WIT) and Transtar are the two main distributors for transmission parts,i personally use Transtar at work for my rebuilds and if you look at the box so does Northern auto parts.
12006a master overhaul kit with frictions and steels for (60-72)
12010c large dacron filter
12022a front flex band
12030b bushing kit
12200 washer kit
12654 spring and roller kit
t22165 shift correction kit(has new manual valve)

These are part#s out of the Transtar catalog this is where i would start on a STOCK rebuild.The shift correction kit t12165 fixes the drain back problem by installing a new manual valve so it charges the converter in park,the stock valve only charges in gear or neutral.This is the kit for fixing the complants the had when they were new.This should not be confused with the TF1-2 kits your read about here which are for performance and a lot firmer shifts.

Some of the bushings are not big wear items and not are all needed,but is nice to have if you need one.Same goes for the washers.
The parts above will give you a good stock rebuild,but i would still tear yours down before i order any parts

Hope this helps.:D