So as a final update it can be done. The motor is in and running and I've been driving it for a few days now. I will put together a complete build thread in the coming days but here is a quick rundown.
A body lift would make this a no-brainer. Period. End of story.
Without a body lift I had to cut my hood, lift the radiator and shroud, adjust all sorts of little odds and ends that would be solved with a body lift.
If you lose the A/C the accesories are easy. I still don't have the A/C hooked up. I need a custom low side hose to the compressor. Also with the a/c I had to clearance the battery tray a bit and cut and section the factory air cleaner housing. Should not be a problem with a body lift though.
I had to source a 62 series flexplate, spacers and flexplate bolts. I wasn't comfortable using the smaller bolts with the larger holes in the 80 series flexplate. looks like a formula for cracks.
The 80 series torque converter works in an 85 2f crank. no question about it. The ends of the cranks are different but the part that is important is the same. I got a complete 62 drivetrain(thanks MsgGrunt) for comparison and the 62 series torque converter ride where the pilot bearing goes, about 1 1/2 inches into the crankshaft. The 80 series torque converter rides in the larger initial recess in the crankshaft, eliminating the the diffence in size problem. I measured the backs of 7 different crankshafts from a 1982, 1984, 1985, 1987, 1988, 1991, and a 1992 and the initial recess in all of them was the same size.
At first I was a little disappointed with the power it was producing, it seemed low. After tweaking the timing and adjusting a few other odds and ends including opening up the VAF and adding some fuel it has come alive. I still haven't brought it over 3500 rpm but it pulls a lot harder down low. There is a hill on the backroads coming home from work that it always used to run with the converter locked but had to down shift to 3rd to make it up. I ran it today at minimum torque converter lockup speed and it ACCELERATED up the hill with the converter locked in 4th gear. Thats at about 1500 rpm. So far I am very happy but it looks like I may have to bump up to at least 89 octane. I got some very minor pinging today. I'll try pulling a bit of timing out of it but I like the power.
All in all, if you aren't afraid of a bit of work this is a great engine for the early 80 series. I got a grand total of $4000 into this, doing most of the work myself. most of that was machine shop and the new toyota pistons and parts. I had no history on the head or block and neither came from a running engine so shot peening, magnafluxing and a full workup on them cost a lot more than I was planning for. It didn't need to be bored out, but I wanted the extra displacement. So that was an unnecessary $1000 between pistons, rings, machining etc. I also needed 2 new motor mounts, all new hoses, and I had to have the locating snout welded back onto the torque converter because I apparently broke it putting the last engine in this beast. If you start with 2 running engines and keep parts replacement to only what is necessary this could be done for a lot cheaper.
Pics to follow