James Dean...that ATF pan gasket is a pain in the rear! Mine did the same thing and the gasket kept on rolling inwards as was tightening it down...dorve me nuts! I think I re did it 3 times before it finally seated correctly and could torque it down in a "star" pattern...going up 3-5 lbs of torque on every pass until the correct torque was reached. Hope this helps but keep at it. I gave up on the hatch struts 3 years ago...but returned with fury a month ago, and presto. Some of the easiest stuff turned out to be mind numbing. I'm going to attempt suspension work next as the wagon is a clunky over small pot holes, seams, and crack in the road. But I'm a little nervous about going into it and not coming out of it sane.