904 Trans suddenly stopped working

If you look at the picture above, you can see the converter lugs are in past the mating surface of the bellhousing. The picture shows the converter all the way in. Keep it like that until the trans is bolted up to the engine. Then the converter should slide forward to mate up to the flex plate. It should slide forward with very little effort.
Usually if you hear the second klunk you should be good to go. All I can say is pull it down and start inspecting parts.