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You should take the trans off and confirm it because obviously it is nothing simple (bleeding). In the picture below behind the green dot is the pivot ball so you should be able to see as gordo said by peeling the rubber back and looking up with a flash light. There is no way it should be moving 2 inches left to right UNLESS you did not snap the arm onto the pivot ball which would let you move freely. Take off the trans and check this, it is most likely an internal problem. 
"Do you guys put the key in "balls down", or up?" -BobbyT 10:28:19 03/06/09 
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