Easiest 727/904 rebuild thread...

I don't think that valve body is compatible with that case. Probably why that trans was in the trash. Check the date code on the vb against the PK #. I always compare the imprint on the separator plate with the case. I bet yours doesn't match. You can't just swap valve bodies around without making sure they match.
That's why RMVBs were made. I won't build a trans without one, or a transbrake.