Inspection of a 904 torqueflite

glhx said

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Direct clutch bushing and seal ring surface -

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Seal ring surface -


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Direct clutch kickdown surface-

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Direct clutch busing -

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And.....here is a problem. Look at that damn magnet-

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All that metal in the top corner -

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I mean......black as I’ve ever seen-

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Don’t know a lot about this yet. -

What caused this to trash that fluid like that?

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The fingernail catch on the low/reverse drum I beleive is where the machining path stops. It is normal that is a raised section left where the drive lugs from the rear planetary lugs engage. The rear band will not ride in the area where your finger is catching.
I would not say that metal on the magnet is not normal. That is precisely why the magnet is there, to keep metal fragments from recirculating. The trans looks good from what I can tell.
The black fluid could be from a burned up torque converter clutch that failed.