No Stall?

My son's Dart has a rebuilt stock 727. It was rebuilt about a year and a half ago. The motor was rebuilt last fall. With the new motor we noticed the stall rpm was much lower. Now the car will not idle in gear at all. When the car is ice cold it will idle in gear for a few seconds. When it is warmed up putting it in gear stops the motor instantly. The fluid is bright red, doesn't smell bad, and is at the proper level. Could something have happend to the convertor while it was out of the car while the engine was being rebuilt? I drained all the fluid out of it and covered the hub while it was out. Thanks in advance for any replies.