I'm pulling the engine and leaving the transmission in place. When I pulled the bell housing cover, I found plenty of nuts around what looked like a flywheel with a ring gear. I was removing all these nuts and got to the last 2 when the leaking started. I reinstalled most of the nuts, but left maybe 6 off which might be connected to a flex plate? I now know I'm working with a 2 piece torque converter and it is an air cooled transmission. What's not making sense to me is that the flywheel is normally bolted to the crankshaft. Yet this ring gear is free moving with those 6 bolts not installed. The Mercury manual I have doesn't provide enough detail. It says remove the splash shield and remove the bolts securing converter to flex plate. OK, What is the flex plate?

Can someone enlighten me on what bolts I need to remove? Thanks.

Also, is there a way to search the forum?

There are 6 bolts holding the converter to the flex plate.  They are three, side by side, 180 degrees apart.  They attach to two thin plates that are riveted to the flex plate.  The ring gear is attached to the converter, not the flex plate as found in later cars.  With those six bolts out, the converter can back away from the flex plate and you can pull the engine or transmission.  The starter will have to be removed as it is bolted to the bellhousing.

John - "The Hoosier Hurricane"

Thanks John. The six bolts I left off were the ones that are 3 in a row and 180 degrees apart. So when I start separating the engine from the transmission, I'm assuming that the torque converter will remain in the bell housing as it would in later cars. Is that right?

i would replace the o ring in the torque converter after you messed with it.

Witz, yes it will remain in the bellhousing.  Maybe pry a little between the flex plate and the converter to make sure the converter pilot is not stuck in the crankshaft counterbore.  It should move back maybe 1/4 inch.

John - "The Hoosier Hurricane"

What is the purpose of the flex plate when the ring gear is attached to the torque converter?

Whether auto transmissions were available in 1939 or not in the 50’s they were still being sorted out and being made for the masses. (think scrubrolet & Ford) All were still air cooled. Open Converters were bolted to flexplate/ring gear solid plates and sealed with o-rings and many bolt/nuts.
Technically this was an ez way to part the two for removal for a Ford automatic which was supplied to other manufacturers as well. If you’ve ever had a 50’s hydramatic engine out while leaving the transmission in hanging from the lip on a firewall you would know.
Old technology is a real pain in the A**. And it’s why all lot of of our old Y’s have C-4’s, AOD’s, even 200R’s and adapter makers are in business.

56 Vic, B'Ville 200 MPH Club Member, So Cal.

Just before I read your post, I realized that the torque converter bolts to the flex plate, whether the ring gear is on the flex plate or the converter. Prior to inheriting my 55 Tbird, I never owned a vehicle with the ring gear attached to the torque converter. 

I've reached the age at which it takes a bit longer for the "light bulb" to turn on. 

Thanks for all the replies. Pulled the engine yesterday and there were no issues with the separation of engine and transmission. That is, if you don't count the hidden bolt on the passenger side below where the starter is mounted. It took a while trying to figure out why the engine was not coming out of there. A drop light and a mirror finally revealed the culprit. Now that the engine is out, that torque converter looks massive compared to today's cars. Now I know why the fluid capacity is so high (10+ qts) for this transmission.
I'm not sure I want to mess with the o ring on the torque converter. I never actually separated the two halves. Once I retightened the last two nuts, the leaking stopped. But you're right. I disturbed a seal and I have easy access at this point.

Now is a good time to have a professional, who knows the converter, to inspect it and replace the seal and anything else that needs attention. I've read it's even possible to tweak it to raise the stall speed if you choose to go with a bigger cam.