I apologize to all. It was and electrical, not mechanical. It was a simple "Positive Battery Clamp". The Cable connection to the Clamp was bad. I've change the Battery Post Clamp and cleaned the crimped cable end. Starts right up.

It's really funny. I have tried cranking the starter, unmounted to the engine. Cranks right up. I guess you can't take any connection for granted.

Has this specific starter ever started this engine? If yes, the pinion gear on the starter isn't the issue.

I would try another starter before going thru all the testing, a faulty starter may function correctly with no load, but fail under under load. I've had this happen in the past

Check the converter and flywheel bolts make sure there tight.
check for a busted flex plate. or maybe check crank for front to back movement. thrust bearing?

The battery fully charged up 100%. I took out the NEW Reman Starter. I connected the battery to the starter with a Jumper Cable and jump start the Solenoid. The Pinion Gear, Shoots out and turned. I reinstalled the Starter and reconnected the forklift battery cable. I also, DOUBLE connected the +/- of starter and +/- of battery with a jumper cable. jump the solenoid and still the "CLACK" Noise. I think the Starter Pinion Gear hitting the Flywheel Ring Gear. Now I got to figure out if the Pinion Gear is the right gear for the Flywheel. If I can install the starter with the solenoid energized so the Pinion Gear is extended out. If everything bolds up with out a bind. that's the right gear. Does anyone have a better idea?

Also, I have check the engine. I have turned it with fan belt. Turns OK. Also, I tried starting it at different turning point of the engine. Still the "Clack". I bet this is a real mine teaser for everyone. The problem is some where with the Pinion Gear and Flywheel. Why, all of a sudden the Pinion Gear does not mesh/engage with the Flywheel?????? This can not be a electrical connection problem.

Also try bypassing the engine to chassis cable by attaching a jumper cable (a jumper cable to jump a dead battery) from the engine directly to the battery.

yep... more viable possibilities

check the motor and make sure it can turn, if its locked up then of course the starter won't turn it.

if there is a large fuse or a breaker inline with the starter motor the motor will not run... but the solenoid could kick in.
Since the motor armature is not actually energized until the solenoid is pulled in this could be a possibility.

where are you grabbing b+ from?
some of these have a fuse from the battery going to the starter cable.
just a thought.

Are you sure the motor can actually turn? Grab the fan and see if it rotates.

Bottomline: I have replaced the starter with a Reman. I have bypassed all electrical with a Jumper cable, doubling up on the starter. Jump the solenoid and still the same "Clack' noise at the starter. I think the problem is more mechanical than electrical. But, the starter use to start and turn the engine right over. Go figure.

Had a issue like that once before checked everything i could think of. Starter dragging and sounding funny. from what i was told toyota had a I.T bulliten out saying that the neg. cable to the frame was to small. clean the area and i put jumper cable to block cause i did'nt think it would help. but it did. so replace the cable with a heavier gage cable see if that helps. would have thought it would have done it all along but kinda come on all of a sudden. on the truck i did.

yes it is most likely a connection problem...
as was suggested check the connections at the battery cables at the battery and the starter, clean them.

Also check the start voltage at the starter ignition wire on the solenoid of the starter and make sure you are not getting a large voltage drop, it should be battery voltage when the key is turned to the start position.

Also check the neutral safety switch on the transmission and it's connections. If there are any voltage drops across this circuit replace the switch.

NEVER file on the starter bendix, if the teeth are showing signs of wear it should always be replaced.
Even though the starter may work 'off of the engine' there still may be a problem inside the solenoid housing, contacts are inside the solenoid housing, you can pull off the cover on the end of the solenoid (3 screws) and check the contacts inside it, if they are melted or burned badly you may be getting a connection but a weak one which would work under 'no load' but not connect enough to carry a load which would explain why it is not engaging the starter motor correctly.
If you find bad contacts inside the solenoid housing do not try to file them, once they are worn or burned you do not have much choice but to get it rebuilt, or trade it in on a reman.

One of the main power cables, negative or positive, to the starter may have a problem.