I'm surprised that I am the very first 61 TBird owner to sort this problem out. After posting this and receiving no responses I done my own investigation, so will now share what I have learnt.
Early 390s have a 153 tooth ring gear and no one makes an aftermarket starter for them, later 390s use an 184 tooth ring gear and have many after market options for starter motors. So what I had on 61 was a starter for a 184 tooth ring gear trying to engage with my 153 tooth ring gear, hence the grinding and destruction of the starter pinion. The clue to what ring gear you have is simple, if you are using a starter that pulls the pinion into the ring gear, it is definitely a 153 tooth ring gear. They are a huge starter with a long shaft with the bendix at the end. Later 390s use the more common "clapper" starter, which are smaller and lighter and push the bendix into the ring gear. The after market hi torque starters for 390s are also suited for the 184 tooth ring gear only. I found a company in the US that actually makes a bendix for the clapper starter that is suited for the 153 tooth ring gear. They are called Total Performance, hard to contact but I finally spoke to them. Rather simple to swap out and good if you want to keep it sort of original looking. I ordered one as well as buying a clapper starter locally. While I was waiting for it to arrive I took a closer look at my ring gear and it was not worth the risk, it had been ground down to far so I bought a new flex plate with 184 tooth ring gear and swapped it out. I used the hi torque starter I bought locally which was slightly chewed but still usable. It starts like it should now, no grinding and a positive start.
I hope this helps others that might find themselves in a similar quandary. Oh yeah, anyone in Oz with an early 390 that wants to buy my clapper starter and bendix, give me a message.
