I went to Harbor Freight and picked up a long reach measuring caliper and was able to measure the clearance at around 4.5mm. Number is tighter than spec of 5.5mm to 6mm, but there isn't a shorter pin to install and I'm assuming this isn't my problem then. I confirmed this by sticking a 6mm long allen key in there for reference/sanity check.

Is the smaller black bore seal difficult to replace while transmission is in the car? I don't want to start disturbing the seal just to find out that it is difficult to remove/install while it is in the car.

I'm running out of ideas as to why the transmission was slipping besides the fact that the piston was a little bit sticky before I started to disassemble and clean things up.

edit:

I think I'm just going to go ahead and replacing the following parts and move on:

005 997 7048 - B2 cover seal
006 997 7347 - Black B2 piston bore seal
140 277 0455 - White large B2 seal that goes around the piston head (T seal)
124 277 0280 - Lower cover gasket
126 277 1480 - Valve body gasket