Thanks to all who helped! The car is finished and on the road again :)

B310gx and ddgonzal were on the money, the "stopper" was getting in the way. I took to it with a large hammer and drift and it came apart nicely. I then slid the tailshaft in and it cleared by the 15mm minimum we needed! I was so happy, we tested it with a full load of passengers and me jumping on the tow bar and it barely moved. We had no cover for the gear knob and I watched it while we drove and it didn't scrape either so it works!

The car is fantastic fun to drive. I'm a Toyota enthusiast myself but I must say that I have grown quite fond of this car. The comparison of worn engine automatic to renewed engine manual is enormous.

Thanks again to all for their help.