You are meant to push the torque converter in towards the transmission when mating the transmission to the engine.
Good advice here on the forum says to rotate the torque converter at this point to make sure it is nicely engaged.
Bolt the two casings together (the transmission and engine) and then pull the torque converter forwards so that the driven plate touches the torque converter mating surface. There shouldn't be any clearance.
The tangs / tabs on the torque converter
Fit into the primary pump on the front of the transmission
(Pictures from this thread
http://www.peachparts.com/shopforum/diesel-discussion/304903-722-118-automatic-transmission-rebuild-monster-diy.html)
Oh crap you've probably got a 722.3 transmission on an '83 - same advice though the tangs on the 722.3 are a bit beefier and I think the front pump design is different (I haven't taken mine to bits yet!)