Over torqued flywheel bolts may yield and eventually fail but will not stop the assemble from turning. The mate between the crank and flywheel will not allow it to warp even if th bolts are on the tight side.
With something as critical as a flywheel Id replace the hardware and torque to spec but it won't fix the issue with the starter.

 

However if the bolts are too long for your flywheel and are bottoming on the block that could definitely bind everything up.

 

Also, if the disks are out of alignment the input shaft won't go in. And once you clutch in, the disks are free to float and self align. So that's not the cause of the issue.
I recall having to use different flywheel bolts with my comp twin, I believe the oe were too long.

 

http://www.modified.com/projectcars/.../photo_03.html

You can see the part number for the bolts used in the one photo
Hope that helps.

Andrew

 

I reused the stock bolts with my comp twin.

 

Sorry, you're right, it wasn't the bolts, there was just a supply issue getting oem replacement bolts when I was doing the story . I remember the issue now.
My disks were labeled "this side in" on the wrong side. If installed this way the disk would interfere with the heads of the flywheel bolts. It's possible your disks were labeled incorrectly as well.

 

I doubt I put it on the wrong way, but we shall see what is wrong tomorrow hopefully.

 

The shop said the Flywheel looked chewed up from the hole when they pulled the starter out and that it might be the wrong flywheel for the car...weird. Maybe I was sent the wrong one, I don't know. Does that mean the clutch is the wrong one also?

 

More than likely... Since the kit is usually packaged together.

Too large of diameter?

 

If so its the company dime not yours witch is always good