Starter/FLywheel Issue
 

I recently purchased a brand new 168-tooth flexplate and 168-tooth staggered bolt starter for my 1981 Camaro. Everytime I crank it over, it makes the most horrible grinding sound. I shimmed it also but the teeth keep grinding together..

If it's still making noise after shimming, I have a feeling you're moving the gears apart, not together.
Read this: https://camaroforums.com/forum/general-tech-5/starter-shimming-20175/

You might take the starter back and get it exchanged. I've fooled with shimming, and had so-so luck. Sometimes they're just junk. Last one was a 350 in my friend's '56 Chevy recently, and we took it back and got another. The new one worked perfectly.

I just bought a new mini-starter for it though. why wouldnt that work?

Well that kinda explains it! I've heard more than one guy have troubles and need shimming on a mini starter. No sense in sending it back, you'll proably just have to shim the next one too!

So what do you suggest I do? I put one shim in today and it didnt seem to work.

Just blindly shimming the starter could lead you just about anywhere and no where at the same time. get a 3/16th drill bit or rod. Stick it between the flywheel and the starter shaft, it should fit in between with no play but no pressure on either. If it is too loose then shim one side of the starter only to "tilt" the starter closer to the flywheel. If it is too tight then use full shims to lower the starter till the 3/16th rod fits nicely inbetween the flywheel and shaft of the starter.

Also if you are using a metric starter/SAE Flywheel (or visa versa) you will never have a proper fit. The pitch of the gears will not be right and that will cause the noise. For example. The 3510S starter is SAE and will fit TH350 and early TH700R4, the 3510MS starter is Metric (same nose cone as 3510S) and will fit later TH700R4, TH200, TH200R4. All those transmissions use a 168 tooth flywheel but with different pitch gears. Hope this helps

Massey